January 1, 1976

The Valuation of Uncertain Income Streams and the Pricing of Options

Key Points

Key points are not available for this paper at this time.

Abstract

A simple formula is developed for the valuation of uncertain income streams consistent with rational risk averse investor behavior and equilibrium in financial markets. Applying this formula to the pricing of an option as a function of its associated stock, the Black-Scholes formula is derived even though investors can only trade at discrete points in time.

Connected Papers

Building similarity graph...

Analyzing shared references across papers

Cite This Study

Mark Rubinstein (Thu,) studied this question.

synapsesocial.com/papers/69dbd514f7e0c66ced8366c5 https://doi.org/https://doi.org/10.2307/3003264

Discussion

Journals

The Bell Journal of Economics

References and Citations

Add This Paper to Your Research Feed

Any time a new paper drops it will be there.