On the Risk of Stocks in the Long Run: A Resolution to the Debate?

Mike Dempsey, Robert Hudson, Kevin Littler and Kevin Keasey

Financial Analysts Journal, 1996, vol. 52, issue 5, 57-62

Abstract: In response to the ongoing debate in this journal about whether the risk of investments in the stock market is increased or decreased by lengthening the investment period, we show that Bodie's attempt to identify market risk with the price of “put” options leads to a circular argument within the workings of arbitrage-free option pricing models. Thus, Bodie failed to rebut the conventional view that longer investment horizons may be thought of as less risky. Bodie's put option prices are relevant, however, to determining “market” prices of stock investment insurance.

Date: 1996
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.2469/faj.v52.n5.2024 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ufajxx:v:52:y:1996:i:5:p:57-62

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ufaj20

DOI: 10.2469/faj.v52.n5.2024

Access Statistics for this article

Financial Analysts Journal is currently edited by Maryann Dupes

More articles in Financial Analysts Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().