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(10.29i)

This is equivalent to

$1={E}_{t}\left[{\stackrel{˜}{m}}_{t+1}{\stackrel{˜}{R}}_{t+1}\right]$ (10.29ii)

(10.29ii)

where ${\stackrel{˜}{R}}_{t+1}$ is the gross rate of return to ownership of the asset. Since Eq. (10.29ii) holds for each state st, it also holds unconditionally; we thus can also write

$1=E\left[\stackrel{˜}{m}\stackrel{˜}{R}\right]$

where E denotes the unconditional expectation. For any two assets i and j (to be viewed shortly as the ...

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