This study investigates the linearity and stationarity properties of government bond returns for the G7 economies. Our results from Luukkonen et al. (1988) linearity test reveal the nonlinear nature of all of the G7 bond returns. Furthermore, we had determined that they are stationary by the...

In this paper, we develop a new stochastic dominance (SD) theory for investors with AD utility that consists of both risk-averse and risk-seeking components. Based on the SD theory we developed in our paper, we find a new solution to answer the observation posed by Friedman and Savage (1948)...