Episode Details

We started the class by completing the last loose ends on risk free rates, before turning our attention to equity risk premiums and what they purport to measures. We looked at historical risk premiums and their limits and then extended the discussion to estimate equity risk premiums for countries without much historical data. If you want to look at the historical returns on stocks, bills, bonds, real estate and gold in the United States, you can get the historical data at:
https://pages.stern.nyu.edu/~adamodar/pc/datasets/histretSP.xlsx
We will come back talk about alternatives to historical risk premiums in the coming sessions. If you are interested in seeing what the equity risk premiums look like, by country, take a look at the spreadsheet at the link below:
https://pages.stern.nyu.edu/~adamodar/pc/datasets/ctryprem.xlsx
On the riskfree rate front, I have done many posts on why I think the Fed’s power to set interest rates is overrated. You may want to try these two:
https://aswathdamodaran.blogspot.com/2013/06/the-fed-and-interest-rates-lessons-from.html
https://aswathdamodaran.blogspot.com/2024/09/fed-up-with-fed-talk-central-banks.html

Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/risktest.pdf
Slides: https://nyu.box.com/s/ks89xqizlae0hrk1edrev64yu0hk8ngg
Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session5Atest.pdf
Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/sessio5Asoln.pdf

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