Unlocking the Secrets of Equity Risk Premium: Impacting Investment Decisions!
The article discusses different ways to figure out how much extra return investors want for investing in stocks compared to safer investments. One way is to ask investors directly, another is to look at past returns on stocks, and the third is to analyze current stock prices to estimate this extra return (Implied Equity Risk Premium). The author explains these methods and then focuses on the third one. They use real data to estimate the Equity Risk Premium and show their results.