The linear pricing rule is an equivalence: if arbitrage opportunities are absent, state prices exist; if state prices exist, arbitrage opportunities are absent. They also suggest that the yield on any bond can be interpreted as being dependent on future one-year interest rates - roughly, that bond yields are averages of implicit forward rates on one-year loans. Gucci Heritage Leather Hobo Bag. But fashions come and go, so that, over the longer term, average returns tend to be mean-reverting: companies that are in style at one time eventually become inordinately 'out of style' - i.e. Gucci Thongs Sandals Mens. Of course, in active futures markets the contract may well be offset before delivery takes place. Gucci Heritage Leather Hobo Bag. State prices are unique if asset markets are complete in the sense discussed in chapter (An asset market is complete if there exist sufficiently many assets so that, for every state, it is possible to construct an Arrow security - an asset with a unit payoff in the state in question and a zero payoff in all other states. Gucci Shoes Outlet Online. Roll's pessimistic conclusion seems to hint that a test of the CAPM would be possible with enough ingenuity and effort. Gucci Heritage Leather Hobo Bag. Also, a link is established between forward and futures prices for the same underlying asset.