On incompleteness of bond markets with infinite number of random factors

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Abstract

The completeness of a bond market model with infinite number of sources of randomness on a finite time interval in the Heath-Jarrow-Morton framework is studied. It is proved that the market is not complete. A construction of a bounded contingent claim, which cannot be replicated, is provided. © 2010 Wiley Periodicals, Inc.

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Barski, M., Jakubowski, J., & Zabczyk, J. (2011). On incompleteness of bond markets with infinite number of random factors. Mathematical Finance, 21(3), 541–556. https://doi.org/10.1111/j.1467-9965.2010.00438.x

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