3 years ago

The risk premium for common stocks

Business

1 answer:

Brrunno [24]3 years ago

7 0

Answer:

Explanation:

Risk premium is the compensation given to investors for holding risky assets. The more risky an asset is, the higher the premium.

A rational investor would be unwilling to invest in a stock that offers zero premium because there is no compensation for the risk that is borne by the investor.

Risk premium is always positive.

Risk premium = expected rate of return of the asset - expected rate of return of the risk free asset.

The more risky the asset, the higher the expected rate of return. So, the expected rate of return of the asset would always be higher than the risk free rate. This makes risk premium positive

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mestny [16]

Answer:

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alukav5142 [94]

Answer:

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3 years ago

If real gross domestic product (GDP) grew by 2 percent and the inflation rate was 2 percent, then nominal GDP grew by

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Answer:

Explanation:

If the real gross domestic product for the year grew by 2%

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