Question

Can We Explain the Equity Premium Puzzle?

Answer 1

The equity premium the higher return from stocks than from bonds is entrancing puzzle for economists. ... Financial economists have noticed that the equity premium can be predicted by dividend yields and other variables though conventional theory suggests that stock returns are too volatile to forecast.

Answer 2

The equity premium the higher return from stocks than from bonds is entrancing puzzle for economists. Financial economists have noticed that the equity premium can be predicted by dividend yields and other variables though conventional theory suggests that stock returns are too volatile to forecast.

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