An Overview Of The Equity Risk Premium As far as theory is concerned , stocks should provide a greater return than safe investments prevailing in the market like Treasury Bonds. The difference is called the equity risk premium It is the excess return that you can expect from the overall market above a risk-free return. The equity premium helps to set portfolio return … [Read more...]
Equity Risk Premium : The Overview
A risk premium is the minimum difference a person requires to be willing to take an uncertain bet, between the expected value of the bet and the certain value that he is indifferent to.The equity risk premium is commonly viwed as the extra retun needed to induce investors to risk their money in the stock market rather than opting for the safe haven of government bonds.It is a … [Read more...]