Introduction1.1 Motivation for the Book1.2 Overview and Structure for the Book2 General Equilibrium Option Pricing Models2.1 The Economy and Utility Functions2.2 Market Risk Premium2.3 Option Pricing Model3 Simulation Comparison3.1 Introduction3.2 Methodology3.3 Simulations3.3.1 Risk-neutral and Physical Jumps3.3.2 Recursive and Expected Utility Functions . 3.3.3 Lognormal and Uniform Jump Size Distributions3.4 Conclusions4 Empirical Comparison4.1 Introduction4.2 Option Pricing Models4.3 Data and Methodology4.4 Empirical Results4.4.1 Parameter Estimates and In-sample Fit4.4.2 Out-of-sample Performance4.4.3 Jump Risk Premium4.5 Conclusions5 Fanning Out Preference and Option Pricing5.1 Introduction5.2 Mcdel Setup5.3 Numerical Studies5.4 Empirical Analysis5.4.1 Data and Methodology5.4.2 Estimation5.4.3 Implied Risk Premiums5.4.4 Model Fit and Volatility Smirks5.5 Concluding Remarks6 Jump Size Distributions and Option Pricing6.1 Introduction6.2 Model Setup6.3 Empirical Investigation6.3.1 Data and Methodology6.3.2 Empirical Results6.4 Concluding Remarks7 Risk Aversion Estimated from Volatility Spread7.1 Introduction7.2 Methodology7.2.1 Realized Volatility7.2.2 Model-free Implied Volatility7.2.3 Volatility Spread7.3 Data and Empirical Results7.3.1 Risk Aversion Estimate7.4 Conclusions8 Predictability of VRP： Hongkong Evidence8.1 Introduction8.2 Model8.2.1 Realized Volatility8.2.2 Model-free Implied Volatility8.2.3 Variance Risk Premium8.2.4 Predictability of Stock Return8.3 Data and Empirical Results8.3.1 Data8.3.2 Summary Statistics of Volatility Measures8.3.3 Variance Risk Premium8.3.4 Predictability of Stock Return8.3.5 Evidences during the Financial Crisis Period8.4 Conclusions9 Predictability of VRP： Other International Evidence9.1 Introduction9.2 Empirical Methodology9.2.1 Variance Risk Premium9.2.2 In-sample Predictability Regression9.3 Data and Summary Statistics9.4 In-sample Predictability Results9.5 Concluding Remarks10 Predictability of VRP： A Comparison Study10.1 Introduction10.2 Methodology10.2.1 Construction of Variance Risk Premium10.2.2 Stock Return Predictability Regression10.3 Data and Empirical Results10.3.1 Data and Summary Statistics10.3.2 Empirical Results from International Markets10.4 Concluding Remarks11 Conclusionsll.1 Summary11.2 Future ResearchAppendixA. Non-expected Recursive UtilityB. Jump Risk PremiumC. Variance Risk PremiumD. Covariance Risk PremiumE. Observational Non-equivalenceE Risk-neutral MGFG. Jump Size Distribution