The Equity Premium
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The Equity Risk Premium
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Author : William N. Goetzmann
language : en
Publisher: Oxford University Press
Release Date : 2006-11-16
The Equity Risk Premium written by William N. Goetzmann and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006-11-16 with Business & Economics categories.
This book aims to create a strong understanding of the empirical basis for the equity risk premium. Through the research and anaylsis of two scholars who are experts in this field, this volume presents the key issues that are paramount to investors, including whether or not to use historical data as a method of equity investing, and can the equity premium reflect changes in fundamental values and cash flows of the market.
The Equity Premium Puzzle
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Author : Rajnish Mehra
language : en
Publisher: Now Publishers Inc
Release Date : 2007-09-27
The Equity Premium Puzzle written by Rajnish Mehra and has been published by Now Publishers Inc this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-09-27 with Business & Economics categories.
Over two decades ago, Mehra and Prescott (1985) challenged the finance profession with a poser: the historical US equity premium is an order of magnitude greater than can be rationalized in the context of the standard neoclassical paradigm of financial economics. This regularity, dubbed "the equity premium puzzle," has spawned a plethora of research efforts to explain it away. In this review, the author takes a retrospective look at the original paper and explains the conclusion that the equity premium is not a premium for bearing non-diversifiable risk
The Equity Premium Puzzle Intrinsic Growth Monetary Policy An Unexpected Solution Theory Strategy For The Coming Jobless Age
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Author : Robert Shuler
language : en
Publisher: Lulu.com
Release Date : 2013-11-25
The Equity Premium Puzzle Intrinsic Growth Monetary Policy An Unexpected Solution Theory Strategy For The Coming Jobless Age written by Robert Shuler and has been published by Lulu.com this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-11-25 with Business & Economics categories.
This book shows we must adjust money supply to account for productivity if deflation is to be avoided. The central banker is not profit oriented and can create money at will, not subject to rational investor constraints. Businesses leverage low interest rates enforced by the central bank to grow and increase employment, compensating for the reduced labor necessary for the former level of goods and services. This leveraged difference in returns is the equity premium. Even a one time productivity increase requires a corresponding permanent increase not in the money supply itself, but in the "rate of increase" of the money supply. Given the steady growth in productivity of the last 100 years, the world economy is now grossly under-stimulated and in danger of precipitous deflation. Both academic models and arguments based on historical events are presented, along with analysis of the meaning of money, investor behavior, and practical techniques for obtaining the equity premium in one's portfolio.
The Equity Risk Premium A Contextual Literature Review
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Author : Laurence B. Siegel
language : en
Publisher: CFA Institute Research Foundation
Release Date : 2017-12-08
The Equity Risk Premium A Contextual Literature Review written by Laurence B. Siegel and has been published by CFA Institute Research Foundation this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-12-08 with Business & Economics categories.
Research into the equity risk premium, often considered the most important number in finance, falls into three broad groupings. First, researchers have measured the margin by which equity total returns have exceeded fixed-income or cash returns over long historical periods and have projected this measure of the equity risk premium into the future. Second, the dividend discount model—or a variant of it, such as an earnings discount model—is used to estimate the future return on an equity index, and the fixed-income or cash yield is then subtracted to arrive at an equity risk premium expectation or forecast. Third, academics have used macroeconomic techniques to estimate what premium investors might rationally require for taking the risk of equities. Current thinking emphasizes the second, or dividend discount, approach and projects an equity risk premium centered on 3½% to 4%.
The Equity Risk Premium
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Author : Bradford Cornell
language : en
Publisher: John Wiley & Sons
Release Date : 1999-05-26
The Equity Risk Premium written by Bradford Cornell and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-05-26 with Business & Economics categories.
Das Thema Risikoprämie für Aktien (Equity Risk Premium) wird hier zum ersten Mal verständlich erklärt. Die Risikoprämie für Aktien stellt einen Renditeausgleich dar für das erhöhte Risiko, das ein Anleger bei der Investition in Aktien eingeht, im Vergleich zu einer Investition in risikofreie Staatsanleihen. Die Risikoprämie ist zwar von der Theorie her einfach, jedoch in der Praxis ein sehr komplexes Phänomen. Für Finanzentscheidungen ist es von größter Bedeutung, daß man das Prinzip der Risikoprämie versteht und es anwenden kann. Cornell erläutert das Thema Schritt für Schritt sehr anschaulich und ohne terminologischen Ballast. Zunächst wird die Risikoprämie im Zusammenhang mit der Geschichte des Aktienmarktes betrachtet. Der Haussemarkt der 90er dient dabei als Fallstudie. Cornell zeigt, welche Rückschlüsse man durch die Analyse der Risikoprämie im historischen Verlauf für den Aktienmarkt ziehen kann, z.B. ob Aktienkurse steigen oder fallen oder ob sich der Aktienmarkt verändert. Vorausschauende Schätzungen der Risikoprämie werden anhand verschiedener konkurrierender Modelle analysiert, wobei die Vorzüge der jeweiligen Methode mitbewertet werden. 'Equity Risk Premium' ist das erste Buch, das dieses wichtige Prinzip der Risiko-Nutzen-Analyse erschöpfend behandelt. Es vermittelt einen tiefen Einblick und deckt alle Grundlagen ab, damit Investoren fundierte Finanzentscheidungen treffen können. Ein absolutes Muß für institutionelle Anleger, Geldmanager und Finanzvorstände, die auf eine fundierte Marktanalyse zurückgreifen müssen. (06/99)
Handbook Of The Equity Risk Premium
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Author : Rajnish Mehra
language : en
Publisher: Elsevier
Release Date : 2011-08-11
Handbook Of The Equity Risk Premium written by Rajnish Mehra and has been published by Elsevier this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-08-11 with Business & Economics categories.
Edited by Rajnish Mehra, this volume focuses on the equity risk premium puzzle, a term coined by Mehra and Prescott in 1985 which encompasses a number of empirical regularities in the prices of capital assets that are at odds with the predictions of standard economic theory.
The Equity Premium
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Author : Rajnish Mehra
language : en
Publisher:
Release Date : 1985
The Equity Premium written by Rajnish Mehra and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1985 with categories.
A New Look At The Equity Premium A Survey Of Collegiate Financial Faculty
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Author : Thomas Kochanek
language : en
Publisher: GRIN Verlag
Release Date : 2016-05-11
A New Look At The Equity Premium A Survey Of Collegiate Financial Faculty written by Thomas Kochanek and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-05-11 with Business & Economics categories.
Scientific Essay from the year 2007 in the subject Business economics - Miscellaneous, grade: A, Western Illinois University, language: English, abstract: This paper deals with the difference of potential returns of diverse assets within a long-term period. Recent articles investigated an unexplainable abnormality of long term returns of stocks in comparison to risk-free securities even if stocks were risk- adjusted. This phenomenon is called the Equity Premium Puzzle. With this paper we want to investigate how current investors make use of the disclosures of these papers. Since one assumption of capital markets is that any information is available to any investor in the world, any investor who invests on a long term basis would act irrational if she invests within the bond market, while she could earn a lot more money in the stock market. Furthermore this fact of the existence of not rational acting investors might show that capital markets are not that efficient as expected or information among investors are not shared sufficiently through markets as an earlier study showed. In our study we created a questionnaire of about 22 questions. All questions which were applied were held superficially, so that the respondent had no clue which goal we were looking for with that survey. We distributed our questionnaire to all available investors of all different ages. However we tried to focus on those investors with a long time investment horizon, such as students, pupils or early workers in the end 20’s or less. Since the Equity Premium Puzzle is not only a national issue, we did our survey not only in the United States of America but also in Germany.
The Equity Premium Puzzle Ambiguity Aversion And Institutional Quality
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Author : S. Nuri Erbas
language : en
Publisher: International Monetary Fund
Release Date : 2007-09
The Equity Premium Puzzle Ambiguity Aversion And Institutional Quality written by S. Nuri Erbas and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-09 with Business & Economics categories.
With cross-section data from 53 emerging and mature markets, we provide evidence that equity premium puzzle is a global phenomenon. In addition to risk aversion, equity premium may reflect ambiguity aversion. We explore the sources of equity premium using some pertinent fundamental independent variables, as well as the World Bank institutional quality indexes and other proxies for the degree of ambiguity in the sample countries. Some World Bank and other indexes are statistically significant, which indicates that a large part of equity premium may reflect investor aversion to ambiguities resulting from institutional weaknesses.
Behavioral Explanation Of The Equity Premium Puzzle
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Author : Kevin Rink
language : en
Publisher: GRIN Verlag
Release Date : 2010-04
Behavioral Explanation Of The Equity Premium Puzzle written by Kevin Rink and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-04 with Business & Economics categories.
Bachelor Thesis from the year 2010 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, European Business School - International University Schlo Reichartshausen Oestrich-Winkel, language: English, abstract: Ever since the equity premium puzzle (EEP) was published by Mehra and Prescott (1985), it has become one of the most investigated problems in economics (Mehra, 2003, p. 54). The EEP describes the fact that we cannot link historic stock returns with the volatility of consumption growth (in a sense to be made precise below). Mehra and Prescott call this a puzzle as their consumption-based asset pricing model can not plausibly explain the S&P 500's annual risk premium of 6.2% over relatively risk-free governmental treasury bills between 1889 and 1978. This model reproduces an equity premium of 6.2% solely by adapting unreasonable estimates of agents' risk aversion (Mehra & Prescott, 1985, pp. 155-156). In this way, the model also predicts an extreme size of the risk-free rate (Cochrane, 2000, p. 416). Thus, the equity premium is not able to be explained exclusively by the risk of stock price fluctuations. (...) This thesis will examine the EPP from a behavioral perspective. The major research question to be pursued is this: How do behavioral approaches explain the equity premium puzzle? In order to answer this question, a variety of subtasks must be addressed. This includes the investigation of the initial model of Mehra and Prescott (1985) as well as its underlying assumptions. That is, in particular, needed because several well-established classical assumptions must be dropped to set up descriptive behavioral models. In addition, implications from psychology and behavioral economics must be introduced to answer the overall question of this thesis. Hence, the thesis will focus on the notions of loss aversion, narrow framing, and regret theory in an effort to explain the EPP. (...) The remainder of this thesis is or
