The view presented here assumes that the market prices risk (premium) arbitrarily correctly, and then argues the benefits of that.
What is optimal depends on the premium and a subjective assessment of the risk. There is no guarantee that what market offers is optimal.
The view presented here assumes that the market prices risk (premium) arbitrarily correctly, and then argues the benefits of that.
What is optimal depends on the premium and a subjective assessment of the risk. There is no guarantee that what market offers is optimal.