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The Fundamental Theorems of Prevision and Asset Pricing

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journal contribution
posted on 12.04.2007, 00:00 authored by Mark J. Schervish, Teddy Seidenfeld, Joseph B. Kadane

We explore two connections between the concepts of coherence, as defined by de Finetti, and arbitrage-free asset pricing in financial markets. We contrast these concepts when random quantities may be unbounded. And we discuss some of the consequences for arbitrage theory when coherent previsions are merely finitely (but not countably) additive.


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