Empirical Asset Pricing

Empirical Asset Pricing is the study of how various factors influence the prices of financial assets, such as stocks and bonds. Researchers analyze historical data to identify patterns and correlations, helping to understand why certain assets perform better than others. This approach combines theory with real-world data to test and refine models that predict asset prices. By examining factors like market trends, economic indicators, and investor behavior, empirical asset pricing provides insights that can inform investment decisions and improve financial strategies. Essentially, it seeks to bridge the gap between economic theory and practical market observations.