Occupation-level income shocks and asset returns: their covariance and implications for portfolio choice
This paper develops and applies a simple graphical approach to portfolio selection that accounts for covariance between asset returns and an investor's labor income. Our graphical approach easily handles income shocks that are partly hedgeable, multiple risky assets, multiple risky assets, many periods, and life cycle considerations.
|Date of creation:||24 Oct 2013|
|Date of revision:||24 Oct 2013|
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