Economy, asked by beherarajani620, 1 day ago

Can We Explain the Equity Premium Puzzle?

Answers

Answered by ranisweta538

Explanation:

The premium is supposed to reflect the relative risk of stocks compared to "risk-free" government securities. However, the puzzle arises because this unexpectedly large percentage implies an unreasonably high level of risk aversion among investors.

Answered by keanuvaz

Answer: The premium is supposed to reflect the relative risk of stocks compared to "risk-free" government securities. However, the puzzle arises because this unexpectedly large percentage implies an unreasonably high level of risk aversion among investors.

Explanation: hope it helps

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