Risk
Catastrophe Risk
Does the investment market consider the consideration of catastrophic risk in Equity Risk Premium? While the likelihood of a macroeconomic catastrophe is not high, it still occurs periodically. […]
Archive
Category: Equity Risk Premiums – by Aswath Damodaran
Market Efficiency
Illusion of Money
The Modigliani-Cohn Hypothesis is a significant model that describes the nonrational behavior of asset pricing and its impact on the Equity Risk Premium. According to the model, investors […]
Risk
Illusion of Risk
What does high-risk illusion and low resistance to good projects imply? #behavioralfinance The #NarrowFraming suggests that discussing investment decisions in isolation highlights the neglect of nonrational risks (Narrow […]
Risk
ERP Puzzle
In academic studies, the risk premium is usually estimated at 6-7%. However, what opinion should be expressed about the segmentation of time and calculation mechanisms, as many interpret […]
Risk
CFOs about ERP
From 2000 to 2017, a survey of 10,000 #CFOs was conducted regarding how they assess the risk premium of capital – that is, the difference between expected returns […]
Market Efficiency
The Small-Cap Premium
The small-cap premium (if such a thing exists) typically peaks in January… It’s unexpected, but still… Equity Risk Premiums (ERP): Determinants, Estimation, and Implications – The 2022 Edition […]
Market Efficiency
The Globalization of Risk
Source:Equity Risk Premiums (ERP): Determinants, Estimation, and Implications – The 2022 Edition Updated: March 23, 2022, Aswath Damodaran; Stern School of Business