Q III-5) Suppose in the past 50 years, US real stock reruns have averaged about 9% with standard deviation of about 16%. On the other
Q III-5) Suppose in the past 50 years, US real stock reruns have averaged about 9% with standard deviation of about 16%. On the other hand, average real return on T-Bills (risk free) is about 1%. Mean and Standard deviation of aggregate consumption growth per annum is about 1.8% and 1% respectively. What do these facts imply about the range of coefficient of Relative Risk Aversion y
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