Intensive research efforts have been devoted to exploring different specifications of the model outlined above. Asset A lies above the SML; it has a mean rate of return higher than that predicted by the CAPM. Gucci Indy Large Brown. The significance of the result is that it shows (a) why forward and futures prices may differ, and (b) the circumstances in which they are likely to be close approximations to one another. Gucci Babouska For Sale. where gt is what Barsky and De Long call the 'permanent' growth rate in dividends as of date t - essentially, the average dividend growth rate expected from date t onwards. Gucci Indy Large Brown. But this is not enough to eliminate risk, because it implies merely that positive values in some states are balanced by negative values in others. Gucci Catherine Guccissima Dome Satchel. In summary: even if Shiller's specification accords well with the notion of asset market efficiency, rejection of the hypothesis may provide few insights about how well asset markets function. Gucci Indy Large Brown. The arbitrage principle links stock index futures prices with the underlying share prices in the same way as for any other asset.