The dynamic model with time‐additive utility is defined. The intertemporal budget constraint is explained. SDF processes are defined in terms of a martingale property. There is a strictly positive SDF process if and only if there are no arbitrage opportunities. Dynamic complete markets are explained. The difference between the price of an asset and its value calculated from an SDF process is called a bubble. There is no bubble if a transversality condition is satisfied. Some constraints on trading strategies are needed to rule out Ponzi schemes. SDF processes are derived for nominal asset prices and for asset prices denominated in a foreign currency.