Download This PaperFinancial Giffen Goods: Examples and Counterexamples
12 Pages Posted: 5 Jun 2007
Date Written: June 5, 2007
Abstract
In the basic Markowitz and Merton models, a stock's weight in efficient portfolios goes up if its expected rate of return goes up. Put differently, there are no financial Giffen goods. By an example from mortgage choice we illustrate that for more complicated portfolio problems Giffen effects do occur.
Keywords: Finance, portfolio choice, Giffen good, mortgage planning
JEL Classification: G11
Suggested Citation: Suggested Citation
Poulsen, Rolf and Rasmussen, Kourosh Marjani, Financial Giffen Goods: Examples and Counterexamples (June 5, 2007). Available at SSRN: https://ssrn.com/abstract=991347 or http://dx.doi.org/10.2139/ssrn.991347
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