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·2024
Large Sample Estimators of the Stochastic Discount Factor
Soohun Kim, Robert A. Korajczyk
IF 2.2Journal of Financial Econometrics
초록

Abstract We propose estimators of the stochastic discount factor using large cross-sections of individual stocks. We introduce a short time-block structure on a large N, T panel to exploit unbalanced panels of individual stock returns and suggest a novel bias correction to achieve the consistency of our estimators. Our estimators can accommodate pre-specified traded and nontraded factors, and latent factors. The estimators perform well in simulations. We apply our estimators to return data for U.S. individual stocks over a 50-year sample period and identify those factors in popular asset pricing models that command significant premia. A number of proposed nontraded factors have insignificant risk premia. Contrary to many studies, we find the market factor has a significant premium, as do profitability, value, and momentum factors.

키워드
EstimatorEconometricsEconomicsSample (material)Stochastic discount factorMathematicsStatisticsCapital asset pricing model
타입
article
IF / 인용수
2.2 / 0
게재 연도
2024

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