Equity Risk Premium

eThe Equity Risk Premium in January 2007: Evidence from the world(a) chief financial officer Outlook Survey John R. Graham Fuqua School of Business, Duke University, Durham, NC 27708, the States Campbell R. Harvey* Fuqua School of Business, Duke University, Durham, NC 27708, USA field Bureau of Economic Research, Cambridge, MA 02912, USA ABSTRACT We analyze the results of the most upstart legislate oer of U.S. Chief Financial Officers (CFOs) which looks ahead to the first fag end of 2007 and beyond. We manifest expectations of the equity happen premium broadsided over a 10-year horizon relative to a 10-year U.S. Treasury bond. This multi-year slew has been conducted every quarter from June 2000 to November 2006. Each quarter the stick to too provides measures of cross-sectional variableness about the risk premium, skewness, and a measure of individual irresolution. The individual uncertainty is deduced from the 80% confidence time interval that e ach respondent provides for his or her risk premium assessment. We also present evidence on the determinants of the long-term risk premium. Our abbreviation suggests there is a positive correlativity between the ex ante risk premium and real cheer pass judgment as reflected in Treasury Inflation Indexed Notes. The level of the risk premium also appears to track mart volatility as reflected in the VIX index. JEL Classification: G11, G31, G12, G14 Keywords: Cost of capital, equity premium, long-term market returns, long-term equity returns, expected excess returns, disagreement, individual uncertainty, skewness, asymmetry, survey methods, risk and reward, TIPs, VIX ______________________________________________________________________________ *Corresponding author, Telephone: +1 919.660.7768, Fax: +1 919.660.8030, E-mail: cam.harvey@duke.edu. We appreciate the comments of an anonymous referee. We appreciate the research virtuoso of Hai Huang and Runeet Kishore. Version January 18, 2007. This is part of a ! series of papers that pass on for be posted...If you want to get a full essay, gearing up it on our website: OrderCustomPaper.com

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