State Space Geometry of Asset Pricing: An Introduction

22 Pages Posted: 26 Aug 2015 Last revised: 9 Mar 2016

See all articles by Igor Pozdeev

Igor Pozdeev

affiliation not provided to SSRN

Date Written: March 8, 2016

Abstract

This note is aimed at familiarizing the reader with state space geometry, a useful tool in teaching asset pricing concepts. Building on the analogy between expectation and dot product, I visualize basic notions using Euclidean geometry in 2D and 3D. Numerical examples are given such that the reader could easily follow the explanations.

Keywords: asset pricing, state space geometry, projection

JEL Classification: G12

Suggested Citation

Pozdeev, Igor, State Space Geometry of Asset Pricing: An Introduction (March 8, 2016). Available at SSRN: https://ssrn.com/abstract=2650167 or http://dx.doi.org/10.2139/ssrn.2650167

Igor Pozdeev (Contact Author)

affiliation not provided to SSRN

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
198
Abstract Views
894
Rank
277,211
PlumX Metrics