Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Investors invest in the equities for the purpose of higher return According to the view of...

Investors invest in the equities for the purpose of higher return According to the view ofAmihud 2002 the risk free rate of return provides less amount return compare to that of the equities

Investors invest in the equities for the purpose of higher return. According to the view ofAmihud (2002), the risk free rate of return provides less amount return compare to that of the equities. Therefore, the investors are inclined to take the additional risks. However, the risk free rate of return is also termed as the riskless bond. The difference between the equity rate of return and the risk free rate of return is also termed as the equity rate of return (ERP). Specifically, the ERP indicates the value that attracts the investors to invest in the equities bearing the additional risks. ERP can be treated as one of the most important tools in the financial model. The financial analysts face problems in calculating the equity risk premiums mainly due to the unavailability of the proper data. In this context,Amihud and Mendelson (2009) has shown that the ERP for USA has largely remained into 6%.
 Developed (all): equally weighted ERP portfolios composed by Australia, Canada, France, Germany, Italy, Japan, Netherlands, Norway, Singapore, Spain, Switzerland, UK and United States  Emerging (all): equally weighted ERP portfolios composed by Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Philippines, Poland, Russia, Republic of South Africa, Korea and Turkey  Asia: equally weighted ERP portfolios composed by China, India, Indonesia, Malaysia, Philippines and Korea  Latin America: equally weighted ERP portfolios composed by Argentina, Brazil, Chile, Colombia and Mexico  Eastern Europe: equally weighted ERP portfolios composed by Czech Republic, Hungary, Poland, Russia and Turkey  Africa & Middle East: equally weighted ERP portfolios composed by Egypt, Morocco and Repuplic of South Africa Note that in case of missing data, mainly due to data availability, a zero weight has been used. Once

Document Preview:
 

Order IdEHUK4764Order TypeFinance AssignmentWords3000Deadline2015-01-28TopicEstimate the ex-post equity risk premium of G7 countries and the following emerging markets : India, China, Indonesia, Malaysia, Russia, South Africa,brazil from 1988-2014SubjectFinanceRefrence SystemWriter NameDM AssociateAdditional RequirementCalculations must be shown , data must be taken from MSCI total return index and one month treasury bill must be used as a proxy for risk free rate of interest, returns can be calculated on a monthly basis.Admin Remarkwe need this work at a very high standard Must cross check all the requirements and follow up properly all the requiremwents

Jul 27 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions