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What Does Market Risk Premium mean?
Market Risk Premium refers to the expected return on a risk asset, minus the risk-free rate.
A good barometer for the risk-free rate is using a U.S. Treasury bond, which is largely considered a risk-less asset if held to maturity. To give an example, let’s say the annual expected return on Stock ABC is 11%, and a 1-year U.S. Treasury pays 2%. In this case, the market risk premium is the difference between the two, or 9%.
Often times, the market risk premium is used in the context of an equity index, like the S&P 500, versus U.S. Treasuries.
What are My Keogh Plan Investment Options?
Keoghs can hold a wide range of investments, and it will mostly depend on your plan trustee
What is a Life Estate?
A life estate is often created by an older parent when they sign over the house to their adult children
What is IRS Publication 521 on Moving Expenses?
Publication 521 details the methods and requirements for tax deductions related to moving expenses (job related move)
How Can I Buy Bitcoin?
The most common way to buy Bitcoin is through online services such as Coinbase, Bitpanda, Bitquick, Localbitcoins, and Spectrocoin
What is Acquisition Accounting?
Acquisition Accounting is a standardized way to account for the assets and liabilities of companies who are part of a M&A
What is an Account Hold?
An Account Hold is similar to the term Account Freeze, as both imply that transactions have been suspended for an account
What is the Federal Housing Administration (FHA)?
The Federal Housing Administration (FHA) protects lending institutions from mortgage defaults
How to use the On-Balance Volume in trading
Traders often look for 'harmony' in the movements of the On-Balance Volume (OBV) and a security's price
How do Market “Bubbles” Burst?
In short, a bubble forms when investors start bidding up the price of an asset well beyond its intrinsic value
What is Sharpe Ratio?
Sharpe Ratio reduces the two measures of mean and variance into one value that to indicate how much return is expected