Optimal consumption and portfolio selection with negative wealth constraints, subsistence consumption constraints, and CARA utility
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초록

We consider the optimal consumption and portfolio selection problem with constant absolute risk aversion (CARA) utility. The economic agent in this model receives constant labor income, and her economic behavior is restricted on consumption and wealth, which are called the subsistence consumption constraint and the negative wealth constraint. We use the convex duality method to derive the value function and the optimal policies in closed-form solutions. Also we illustrate some numerical examples. (C) 2018 The Korean Statistical Society. Published by Elsevier B.V. All rights reserved.

키워드

Portfolio selectionNegative wealth constraintsSubsistence consumption constraintsConvex duality methodCARA utility
제목
Optimal consumption and portfolio selection with negative wealth constraints, subsistence consumption constraints, and CARA utility
저자
Kim, Ji YeounShin, Yong Hyun
DOI
10.1016/j.jkss.2018.06.001
발행일
2018-12
유형
Article
저널명
Journal of the Korean Statistical Society
47
4
페이지
509 ~ 519