Abstract
As Harrison and Kreps (1978) noted, unless traders are all identical and obliged to hold a stock forever, speculation would not extinguish in market, and different opinions on future evolution of asset price yield whereby. This paper derives intertemporal futures pricing formulas accounting for such presumption in a partial-equilibrium sense with stochastic interest rate and changing opinions. The closed-form solutions show that some indeterminate empirics such as converging patterns of Contango and normal backwardation result from complicated relationships among interacted dynamics of interest, spot price, and changing opinions simultaneously.
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