Local Risk-Minimization under the Benchmark Approach
  We study the pricing and hedging of derivatives in incomplete financial markets by considering the local risk-minimization method in the context of the benchmark approach, which will be called benchmarked local risk-minimization. We show that the proposed benchmarked local risk-minimization allows to handle under extremely weak assumptions a much richer modeling world than the classical methodology. 
Francesca Biagini, Alessandra Cretarola and Eckhard Platen
q-fin.PR math.PR