λ=0.5, ω=0 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0 Home Country Foreign Country Asset 1 Asset 2 1

λ=0.5, ω=0.05 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0.05 Home Country Foreign Country Asset 1 Asset 2 1

λ=0.5, ω=0.10 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0.10 Home Country Foreign Country Asset 1 Asset 2 1

λ=0.5, ω=0.15 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0.15 Home Country Foreign Country Asset 1 Asset 2 1

λ=0.5, ω=0.20 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0.20 Home Country Foreign Country Asset 1 Asset 2 1

λ=0.5, ω=0.25 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0.25 Home Country Foreign Country Asset 1 Asset 2 1

λ=0.5, ω=0.25 Home Country Foreign Country Asset 1 Asset 2 1 (λ+ω) investors receive information about Asset 1 (λ-ω) investors receive information about Asset 2 (λ-ω) investors receive information about Asset 1 (λ+ω) investors receive information about Asset 2 λ=0.5, ω=0.25 Home Country Foreign Country Asset 1 Asset 2 1 Grossman Stiglitz (1980), Hellwig (1980), Admati (1985): postulate equilibrium price as a linear function of the average signals and the aggregate stock supply, find the optimal demands and impose market clearing to solve for the undetermined coefficients.

Normalized price signal Private signals Normalized price signal Nu conteaza unde e investitorul, daca are acelasi tip i(.) atunci va avea acelasi portofoliu. Apoi i(1,2) si i(1) au acelasi portfoliu pentru activul 1. Explica ca este un efect de compozitie. Spune cum calculezi home bias

Explica gamma! Grossman Stiglitz (1980), Hellwig (1980), Admati (1985): postulate equilibrium price as a linear function of the average signals and the aggregate stock supply, find the optimal demands and impose market clearing to solve for the undetermined coefficients.