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The fundamental asset pricing equation can be succinctly stated as: 1=EP[mR] where m is the stochastic discount factor (or pricing kernel). (a) In this equation,

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The fundamental asset pricing equation can be succinctly stated as: 1=EP[mR] where m is the stochastic discount factor (or pricing kernel). (a) In this equation, how is price related to risk? (b) What is the expected return to an asset that is uncorrelated with the stochastic discount factor? Does this imply that the cashflow generated by this asset does not vary over time

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