The Missing Risk Premium
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The Missing Risk Premium
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Author : Eric G. Falkenstein
language : en
Publisher: Createspace Independent Publishing Platform
Release Date : 2012-08-16
The Missing Risk Premium written by Eric G. Falkenstein and has been published by Createspace Independent Publishing Platform this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-08-16 with Finance categories.
Risk is the deviation from the consensus rather than an exposure to a covariance, and this implies there is no risk premium in general. It also implies that when there are a large number of people buying highly volatile assets, such assets will have negative returns in equilibrium. As there are several independent motivations for people to buy highly volatile assets, intuitively risky assets generally have lower-than-average returns. This novel conception of risk implies many things more consistent with the data than the current theory. Risk taking is an important life skill, so understanding its nature is important, and unfortunately academics who study it full-time are like so many other experts: when not irrelevant, 180 degrees wrong. This book explains the current asset pricing theory, and proposes an alternative, using theory and a unique survey of the data across many asset classes. Familiarity with some MBA level finance is helpful but not necessary to appreciate this book.
High Returns From Low Risk
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Author : Pim van Vliet
language : en
Publisher: John Wiley & Sons
Release Date : 2017-01-17
High Returns From Low Risk written by Pim van Vliet 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 2017-01-17 with Business & Economics categories.
Believing "high-risk equals high-reward" is holding your portfolio hostage High Returns from Low Risk proves that low-volatility, low-risk portfolios beat high-volatility portfolios hands down, and shows you how to take advantage of this paradox to dramatically improve your returns. Investors traditionally view low-risk stocks as safe but unprofitable, but this old canard is based on a flawed premise; it fails to see beyond the monthly horizon, and ignores compounding returns. This book updates the thinking and brings reality to modelling to show how low-risk stocks actually outperform high-risk stocks by an order of magnitude. Easy to read and easy to implement, the plan presented here will help you construct a portfolio that delivers higher returns per unit of risk, and explains how to achieve excellent investment results over the long term. Do you still believe that investors are rewarded for bearing risk, and that the higher the risk, the greater the reward? That old axiom is holding you back, and it is time to start seeing the whole picture. This book shows you, through deep historical simulation, how to reap the rewards of smarter investing. Learn how and why low-risk, low-volatility stocks beat the market Discover the formula that outperforms Greenblatt's Construct your own low-risk portfolio Select the right ETF or low-risk fund to manage your money Great returns and lower risk sound like a winning combination — what happens once everyone is doing it? The beauty of the low-risk strategy is that it continues to work even after the paradox is widely known; long-term investment success is possible for anyone who can shake off the entrenched wisdom and go low-risk. High Returns from Low Risk provides the proof, model and strategy to reign in your exposure while raking in the profit.
The Risk Premium Factor
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Author : Stephen D. Hassett
language : en
Publisher: John Wiley & Sons
Release Date : 2011-08-31
The Risk Premium Factor written by Stephen D. Hassett 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 2011-08-31 with Business & Economics categories.
A radical, definitive explanation of the link between loss aversion theory, the equity risk premium and stock price, and how to profit from it The Risk Premium Factor presents and proves a radical new theory that explains the stock market, offering a quantitative explanation for all the booms, busts, bubbles, and multiple expansions and contractions of the market we have experienced over the past half-century. Written by Stephen D. Hassett, a corporate development executive, author and specialist in value management, mergers and acquisitions, new venture strategy, development, and execution for high technology, SaaS, web, and mobile businesses, the book convincingly demonstrates that the equity risk premium is proportional to long-term Treasury yields, establishing a connection to loss aversion theory. Explains stock prices from 1960 through the present including the 2008/09 "market meltdown" Shows how the S&P 500 has consistently reverted to values predicted by the model Solves the equity premium puzzle by showing that it is consistent with findings on loss aversion Demonstrates that three factors drive valuation and stock price: earnings, long term growth, and interest rates Understanding the stock market is simple. By grasping the simplicity, business leaders, corporate decision makers, private equity, venture capital, professional, and individual investors will fully understand the system under which they operate, and find themselves empowered to make better decisions managing their businesses and investment portfolios.
Risk Premium
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Author : Fouad Sabry
language : en
Publisher: One Billion Knowledgeable
Release Date : 2024-02-04
Risk Premium written by Fouad Sabry and has been published by One Billion Knowledgeable this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-02-04 with Business & Economics categories.
What is Risk Premium In order to compensate for being exposed to a higher level of risk, an individual is obliged to pay a risk premium, which is a quantitative measure of the additional return that is required. As shown by the formula that follows, it is commonly utilized in the fields of finance and economics. The broad definition of it is the predicted risky return less the risk-free return. How you will benefit (I) Insights, and validations about the following topics: Chapter 1: Risk premium Chapter 2: Financial economics Chapter 3: Capital asset pricing model Chapter 4: Weighted average cost of capital Chapter 5: Risk aversion Chapter 6: Cost of capital Chapter 7: Modern portfolio theory Chapter 8: Arbitrage pricing theory Chapter 9: Beta (finance) Chapter 10: Equity premium puzzle Chapter 11: Jensen's alpha Chapter 12: Equity risk Chapter 13: Market anomaly Chapter 14: Business valuation Chapter 15: Cost of equity Chapter 16: Diversification (finance) Chapter 17: Fama-French three-factor model Chapter 18: Portfolio manager Chapter 19: Low-volatility anomaly Chapter 20: Untradable assets Chapter 21: Factor investing (II) Answering the public top questions about risk premium. (III) Real world examples for the usage of risk premium in many fields. Who this book is for Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Risk Premium.
The Shape Of The Risk Premium
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Author : Benoît Perron
language : en
Publisher:
Release Date : 2004
The Shape Of The Risk Premium written by Benoît Perron and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Nonparametric statistics categories.
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 Missing Billionaires
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Author : Victor Haghani
language : en
Publisher: John Wiley & Sons
Release Date : 2023-08-28
The Missing Billionaires written by Victor Haghani 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 2023-08-28 with Business & Economics categories.
An Economist Best Book of the Year "Making Money and Keeping It" – The Wall Street Journal Over the past century, if the wealthiest families had spent a reasonable fraction of their wealth, paid taxes, invested in the stock market, and passed their wealth down to the next generation, there would be tens of thousands of billionaire heirs to generations-old fortunes today. The puzzle of The Missing Billionaires is why you cannot find one such billionaire on any current rich list. There are a number of explanations, but this book is focused on one mistake which is of profound importance to all investors: poor risk decisions, both in investing and spending. Many of these families didn’t choose bad investments– they sized them incorrectly– and allowed their spending decisions to amplify this mistake. The Missing Billionaires book offers a simple yet powerful framework for making important lifetime financial decisions in a systematic and rational way. It's for readers with a baseline level of financial literacy, but doesn’t require a PhD. It fills the gap between personal finance books and the academic literature, bringing the valuable insights of academic finance to non-specialists. Part One builds the theory of optimal investment sizing from first principles, starting with betting on biased coins. Part Two covers lifetime financial decision-making, with emphasis on the integration of investment, saving and spending decisions. Part Three covers practical implementation details, including how to calibrate your personal level of risk-aversion, and how to estimate the expected return and risk on a broad spectrum of investments. The book is packed with case studies and anecdotes, including one about Victor’s investment with LTCM as a partner, and a bonus chapter on Liar’s Poker. The authors draw extensively on their own experiences as principals of Elm Wealth, a multi-billion-dollar wealth management practice, and prior to that on their years as arbitrage traders– Victor at Salomon Brothers and LTCM, and James at Nationsbank/CRT and Citadel. Whether you are young and building wealth, an entrepreneur invested heavily in your own business, or at a stage where your primary focus is investing and spending, The Missing Billionaires: A Guide to Better Financial Decisions is your must-have resource for thoughtful financial decision-making.
The Search For A Risk Premium
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Author : Roger W. Gray
language : en
Publisher:
Release Date : 1961
The Search For A Risk Premium written by Roger W. Gray and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1961 with categories.
The Last Risk Premium Standing
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Author : Lewis A. Sanders
language : en
Publisher:
Release Date : 2007
The Last Risk Premium Standing written by Lewis A. Sanders and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Bonds categories.
Sub Saharan Africa S Risk Perception Premium In The Search Of Missing Factors
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Author : William Gbohoui
language : en
Publisher: International Monetary Fund
Release Date : 2023-06-23
Sub Saharan Africa S Risk Perception Premium In The Search Of Missing Factors written by William Gbohoui 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 2023-06-23 with Business & Economics categories.
Policymakers from the sub-Saharan Africa (SSA) region often flag a mispricing of their sovereign debt presumably originating from a perception risk by international investors that lead to "unjustifiably" high borrowing costs. Against this background, this paper explores the extent to which a potential SSA premium exists in the financial markets following a broader two-fold approach. Firstly, using a sample of 1592 international primary sovereign fixed coupon bonds issued between 2003-2021 from Bond Radar by 89 countries, we find that SSA countries pay significantly higher coupon at issuance compared to their peers from other regions. Secondly, we assess whether there is any bias against SSA countries in the secondary market that would result in higher refinancing cost. Based on an unbalanced panel of quarterly data covering 107 countries over 1990 – 2022, we find that SSA countries pay higher refinancing costs in the secondary market. The paper further explores whether there are other factors overlooked by the literature that matter for the risk pricing by international investors. In that respect, we explore the sensitivity of spreads to some structural dimensions where SSA countries face acute challenges―the transparency of budget process, the importance of the informal sector, the level of financial development, and the quality of public institutions. The results show that the excess premium estimated for SSA countries vanishes when these structural factors are accounted for in the regressions.