The aim of this paper is to research the establishment of Chinese rural drinking water market. On the basis of prior research on rural drinking water and water market, we study the market establishment and analyze trading elements, procedure and modes of Chinese rural drinking water market. Then we explore the operating mechanism of the market, such as the supply and demand mechanism, the price mechanism, the competition mechanism and the support mechanism. This study will conduce to the optimization of the allocation of water resources.
Asset pricing under the certainty equivalent approach framework always raises the current value of the asset with the riskless rate first, followed immediately by risk adjustments. Clearly, this type of arrangement does not apply to assets that are expecting to lose values if it were to adhere to feasible economic reasoning. By using the put-call parity relationship and its underlying law of no arbitrage, the needed expected rates of return for the job of option pricing can thus be obtained. This study suggests a new model in old fashion, which can better satisfy the empirical criticism of the Black-Scholes option pricing model.