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An Investigation Of The Equity Premium Using Habit Utility And Equity Returns: Australian Evidence, Lurion De Mello
An Investigation Of The Equity Premium Using Habit Utility And Equity Returns: Australian Evidence, Lurion De Mello
Theses: Doctorates and Masters
The gap between the return on stocks and the return on the risk free assets represented by bonds is named the 'Equity Premium' or 'Equity Risk Premium'. In the history of asset pricing models, one of the most serious problems for the equity premium is that the average equity premium is too large to be explained by standard general equilibrium asset pricing models. Researcher's have tried to use variables such as dividend yield's to explain the gap between stocks and bonds with mixed results. After retrieving around a one percent equity premium with the most standard consumption base asset pricing …