What is the S&P 500 market risk premium?
The market risk premium reflects the additional return required by investors in excess of the risk-free rate. The ERP is essential for the calculation of discount rates and derived from the CAPM. It stems from the IRR which equalizes the discounted present value of forecast cash flow and the current share price.
What is the current market risk premium 2021?
The expected risk premium for the Global Market Index ticked slightly higher in March to an annualized 5.8% pace, fractionally above last month's estimate. The forecast reflects the projected long-run return over the risk-free rate, according to a risk-based model (detailed below).
What is the current market risk premium 2022?
The „market risk premium“ is the difference between the expected return on the risky market portfolio and the risk-free interest rate. It is an essential part of the CAPM where it characterizes the relationship between the beta factor of a risky assets and ist expected return.