Article
The article ‘Prospect Theory and Asset Prices’ by Barberis, Huang & Santos (2001) discusses the asset prices in an economic situation where the investors obtain indirect utility two elements. These elements are consumption and fluctuations resulting from the financial wealth value. The researchers evaluate two economies to identify the data analyzed in the research. Ideally, the authors explore the loss averse associated with the variations that depend on prior investments of stakeholders. In addition, the article explains the low correlation between excess volatility, predictability of stock return and consumption growth. In addition, the writers deviate from previous thoughts that aggregate Continue reading...