Typically an investor incurs risk by issuing a contingent claim. She can try to reduce this risk by trading in the underlying asset according to a strategy which is in some sense appropriate. In an incomplete financial market there usually are several meaningful choices for the determination of...

Incomplete markets provide many challenges for both investment decisions and valuationproblems. While both problems have received extensive attention in complete markets,there remain many open areas in the theory of incomplete markets. We present the resultsin three parts. In the first essay we...

The question how to allocate capital best is as old as financial markets themselves. Maximizing expected gains only might be a good approach but cannot be the best answer because usually high expected gains are driven by highly speculative and risky investments.In this thesis we study economic...