We consider the optimal dividend problem in the so-called degenerate bivariate risk model under the assumption that the …

premia, which take into account risk fluctuations. Using stochastic control theory based on the Hamilton … company can borrow and invest money at a constant real-valued risk-free interest rate r. Our model allows for stochastic risk …

-theoretic probability, moments, characteristic functions, inequalities, and central limit theorems are examined. The theory of risk aversion … * Theory of Risk and Utility * State Price and Risk-Neutral Probability * Single Period Asset Pricing Models * Stochastic …, derivatives, and risk management should also find the book useful in bringing probability and finance together.The book contains …