We quantify the sources of risk in currency returns as a first step toward understanding the returns reported for the … total currency risk over horizons of one to three months. …

, investment, and asset prices over time, as well as perceived policy risk. Quite generally, perceived risk abates as current …. The approach thus provides a measure of the evolution over time of perceived political risk from market prices. We next … compute option prices under the process generated by the model's hazard rate of policy reversal plus an additional market risk …

too high a weight to current dividends relative to future dividends. This is consistent with the widely-held belief that … allow for a time-varying discount rate. In addition our test does not depend on the time-series properties of dividends (e …

theory of investment and dividend policy, where dividends are paid by self-interested CEOs to maintain a balance between …

out a lower proportion of their profits as dividends and finance a larger proportion of their investments from retentions …

Recent empirical work suggests a strong connection between the incentives money managers are offered and their risk … not only effort exertion but also risk taking behavior. The moral hazard problem with risk taking involves an incentive …-compatibility constraint on risk, which we characterize. We distinguish between one period and several periods. In the former case, under mild …