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There is now a new development in the pricing story.
The first (rational pricing) story is the need for a new rational asset pricing model.
In Sect. 3 we derive some empirically testable hypotheses to distinguish between the rational pricing story and the mispricing story.
In contrast, the rational pricing story states that returns compensate risk factor exposures, regardless of characteristics (Davis et al. 2000: 391).
(2001) find evidence in favor of the characteristics story while Lajili-Jarjir (2007) finds evidence in favor of the rational pricing story.
Obviously, in the rational pricing story there might be other than the FFC-model risk factors or factors differently created on the same characteristics that are able to capture the behavior of the returns.
Similar(49)
"We are not only a price story.
And that's not even the whole price story.
But the asset price story is somewhat less straightforward than many have assumed.
The gas price story is a bit like the rigging of Libor, the London-based inter-bank lending rate, explains Macalister.
You only had to show the bowtie logo and name a few models, identify the model lineup and frame the low-price story, and they would come.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com