Andrew Stolz

AUGUST 5, 2020

If an investor moves money from the risk-free asset into the stock market, they should expect to earn a return in excess of the risk-free rate, what is called an equity risk premium. Investments are exposed to two types of risk: systematic and unsystematic. What Impacts the Capital Asset Pricing Model?

Risk-free Rate 52

Risk-free Rate Beta Weighted Average Cost of Capital Risk Premium 52

Equilest

JANUARY 3, 2023

The theory suggests that the expected return on an asset can be modeled as a linear function of various macroeconomic factors or "factor loadings" that affect the asset's risk, such as market risk, industry risk, and country risk. First, we need to estimate the factor loadings for each risk factor.

Risk Premium 40

Risk Premium Risk-free Rate Market Risk Finance 40

Musings on Markets

FEBRUARY 8, 2025

In the first five posts, I have looked at the macro numbers that drive global markets, from interest rates to risk premiums, but it is not my preferred habitat. The second set of inputs are prices of risk, in both the equity and debt markets, with the former measured by equity risk premiums , and the latter by default spreads.

Risk Premium 73

Risk Premium Beta Start-ups Equity 73