New approach to testing Merton's intertemporal asset pricing model to enhance risk management and reduce complexity in financial markets globally.

The failure to accurately price assets lies at the heart of the recent global financial meltdown. A new evolutionary optimal window approach is proposed to price assets in a continuous-time asset pricing model framework. The approach is practical and will enable more accurate and defensible estimates of asset prices, thereby allowing better assessment of risk management and providing more informed advice to investors. Outcomes are nationally important given Australias aging population and the needs of Australianinvestors. Globally, better informed decision-making will reduce the impact of future financial crises and give stakeholders better tools to enhance market efficiency.