Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. why is s&p 500 a good proxy for the implied eq

Why is S&P 500 a good proxy for the implied equity risk premium (ERP) estimation?

80.2K

Verified Solution

Question

Finance

Why is S&P 500 a good proxy for the implied equity riskpremium (ERP) estimation?

Answer & Explanation Solved by verified expert
3.8 Ratings (720 Votes)
The equity risk premium ca be calculated using the formula ERM Risk free rate For example Between a certain period of time the SP 500 exhibited a 15 compounding annual rate of return while the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Why is S&P 500 a good proxy for the implied equity riskpremium (ERP) estimation?

Other questions asked by students

Accounting
1.2K views

This project will be submitted in 3 parts. The submission dates and required parts to be...

Electrical Engineering
1.2K views

Give an example of a closed loop control system and draw its block diagram

General Management
1.2K views

You own a chain of 3 dry-cleaning stores in a medium-size town. A problem in customer...

Calculus
1.2K views

20 Find an equation of the largest sphere with center 5 4 9 that is...

Algebra
1.2K views

The exponential growth of the deer population in the country can be calculated using the...

Algebra
1.2K views

Find the position vector v that corresponds to the vector graphed below Note that each...

Accounting
1.2K views

Deal Offer Musk started buying shares of American social media company Twitter, Inc. in...

Accounting
1.2K views

Evaluate how an enterprise system can intergrate processes and systems in a organization.

Accounting
1.2K views

The management team of Bramble Industries was evaluating its performance for the first half of...

Accounting
1.2K views

Golden Corp., a merchandiser, recently completed its 2018 operations. For the year (1) all sales...

Accounting
1.2K views

A psychrometer (an instrument used to measure humidity) weighing 4 ounces (1/128 slugs) is whirled...

Finance
1.2K views

Slow 'n Steady, Inc., has a stock price of $35, will pay a dividend next...