Suppose there are two periods, O and 1. Denote Stochastic discount factor by m(51), where s1 is a random state, 51 S and Expectation under physical probabilities by E. Denote the payoff of an asset in each state by

(s1). Select all (possibly multiple) claims which are true.

Select one or more:

O a. Discount factor = E{m(s1)]

O b. The price of the asset at period O = E(v(51)m(s+)]

O c. Atomic (Arrow securities) prices are equal to the stochastic discount factor for each state times the probability of each state.

O d. Risk neutral probability is equal to the stochastic discount factor for each state times the probability of each state divided by E[m(s1)].

O e. The stochastic discount can be negative (for standard instantaneous utility we considered)