[PDF] Top 20 The Equity Premium: It s Still a Puzzle

... the equity premium. Like fiat money, the equity premium appears to be a widespread and persistent phenomenon of market ...the equity premium tells us that, like money, the ... See full document

... the equity premium is much less of a puzzle. But the equity premium is still a puzzle for the not so ...participation puzzle unanswered: Why only the "rich" ... See full document

... tackle equity premium puzzle using the fact that bonds in practice must have real values, which are corresponding goods in con- sumption ...risk premium may arise from this ... See full document

... the equity premium puzzle is that the standard intertemporal asset-pricing model together with consumption data does not deliver a sufficiently volatile stochastic discount factor (or, synonymously, ... See full document

... default premium does not entirely explain the return ...he equity premium puzzle may not be why was the average equity return so high but rather why was the average risk-free rate so ... See full document

... The neoclassical growth model and its random types comprise a central structure in modern financial affairs, public finance, and business cycles theory. This model has been widely used by researchers like Lucas (1978). ... See full document

... Standard consumption-based asset pricing models focus on the consumption risk, seen as the only source of fluctuations and information about risk for the informed investor. These models, however, can account for high ... See full document

... would lead to an empirical falsification of equation (6). Such a rejection would not be so damaging if I have simply mis-specified the cash flows, but it would be more consequential if it is due to the failure of the ... See full document

... the equity premium ...of equity, risk-free security, and risk premium for ...the equity premium and volatility ...the equity premium puzzle was ... See full document

... time still the rule. Little interest was expressed on how large the equity premium is or should ...the equity risk premium surfaced after the seminal paper by Mehra and Prescott (1985) ... See full document

... the puzzle is eventually resolved following the path of the equity premium literature, with utility functions and environments that deliver high equity premia and relatively smooth exchange ... See full document

... The failure to find a satisfactory economic explanation of the equity premium puzzle means that these models, and business tools derived from them, are built on shaky theoretical grounds[r] ... See full document

... For decades, researchers were confused by a phenomenon that is known as the equity premium puzzle. It describes a tendency of individuals to invest in low returning instead of the higher returning ... See full document

... II Eviden e of Risk and Mispri ing E e ts I lassify the eviden e bearing on asset mispri ing into ve ategories: 1 return predi tability; 2 the equity premium puzzle; 3 eviden e as to whe[r] ... See full document

... turned out to be reasonable ex post since the cost of capital applied as hurdle rate for these projects appeared to be a good approximation – except for one project: One of the comparable projects, on which the manager ... See full document

... Given that in our regressions we lag top shares and given that our results are robust to the inclusion of many macro/financial control variables, we do not suspect our findings stem from reverse causation or omitted ... See full document

... the equity risk premium puzzle: the fact that the historical realized ERP for the stock mar- ket from 1889 –1978 appeared to be at odds with and, relative to Treasury bills, far in excess of asset ... See full document

... is still possible to deceive employees by the basic gimmick of replacing equity with ...its equity with debt, it can—simply by renaming the money it pays out to investors “interest” rather than ... See full document

... insurance premium instead of the usual ...insurance premium of ...home equity can be set aside for future taxes and ...home equity in the first year of the ... See full document

... The simulation results are tabulated in the appendix and this transparency is intentional to provide a latitude for original research based on the same subject. Some features of the results are noteworthy. The higher the ... See full document