Our task How to estimate and test discount factor model. Ep,=E(m (data 1, parameter)) 1. Bring an asset pricing model to data to estimate free parameters. For example, parameter,yinm=B(c+1/c)-y Or the b in m=b f 2. Evaluate the model, is it a good model or not? Is another model better?
Teaching Objectives 1)understand the main idea(despite the many negative effects of virtual life the author prefers it to real life) and the structure of the text(contrast between virtual life and real life); -2)learn some rules of interpreting new vocabulary