In its simplest form, the Keynes-Hicks theory asserts that backwardation is normally observed in futures markets. The most basic set-up is the so-called 'one-factor' model, in which the risk-free interest rate is assumed to evolve according to some postulated random process. Gucci Flats Bow. Such an interpretation may be nai've, though it is not unusual to associate the model of sections 11.2 and 11.5 as representing one variety of 'market efficiency'. Gucci Duchessa Baguette. For simplicity, suppose that asset j is a forward contract agreed today, t, exactly one period before the delivery date T, so that T ' t + The 'payoff' on the investment in the forward contract is the spot price at delivery, p(T), while the price paid for that payoff is the forward price agreed today, F(t, T). Gucci Flats Bow. See figure 5.8, in which the efficient portfolio set is depicted by the line r0ZE tangent to the frontier FF at Z, the efficient portfolio comprising only risky assets. Gucci Shopping Honolulu. While this view is widely held, not all would agree with Shiller's claim that 'mass psychology may well be the dominant cause of movements in the aggregate stock market' (1989, p. 8). Gucci Flats Bow. More generally, in decision making under uncertainty, investors take into account the expected return as well as risk.