Multiplicative Background Risk

Multiplicative Background Risk

Multiplicative Background Risk by Günter Franke, Harris Schlesinger, Richard C. Stapleton We consider random wealth of the multiplicative form x ỹ, where x and ỹ are statistically independent random variables. We assume that x  is endogenous to the economic agent, but that ỹ is an exogenous and uninsurable background risk. Our main focus is on how the randomness of ỹ affects risk-taking beha...

FS IV 02 – 06 Multiplicative Background Risk

Multiplicative Background Risk by Günter Franke, Harris Schlesinger, Richard C. Stapleton We consider random wealth of the multiplicative form x ỹ, where x and ỹ are statistically independent random variables. We assume that x  is endogenous to the economic agent, but that ỹ is an exogenous and uninsurable background risk. Our main focus is on how the randomness of ỹ affects risk-taking beha...

Risk taking with additive and multiplicative background risks

Risk Taking with Additive and Multiplicative Background risks. We examine the effects of background risks on optimal portfolio choice. Examples of background risks include uncertain labor income, uncertainty about the terminal value of fixed assets such as housing and uncertainty about future tax liabilities. While some of these risks are additive and have been amply studied, others are multipl...

Prudence with Multiplicative Risk

Multiplicative background correction for spotted microarrays to improve reproducibility.

We propose a simple approach, the multiplicative background correction, to solve a perplexing problem in spotted microarray data analysis: correcting the foreground intensities for the background noise, especially for spots with genes that are weakly expressed or not at all. The conventional approach, the additive background correction, directly subtracts the background intensities from foregro...