The Market Risk Premium is calculated using the S&P 500. Explain why the S&P 500 is so

Fantastic news! We've Found the answer you've been seeking!

Question:

The Market Risk Premium is calculated using the S&P 500. Explain why the S&P 500 is so widely used as the Market Portfolio to calculate the Market Risk Premium in the US?

Related Book For answer-question

Strategic management concepts

ISBN: 978-0136120995

13th Edition

Authors: Fred david

See More Books

Posted Date: Jan 08, 2021 07:02 PM

See More Questions

Do you believe the reasons to disclose by-segment financial information offset the reasons not to disclose by-segment financial information? Explain why or why not.
Do you believe the reasons to disclose by-segment financial information offset the reasons not to disclose by-segment financial information? Explain why or why not.
Do you believe the documentation included in tax accrual audit work-papers is likely affected by auditors knowledge that those work-papers can be obtained by the IRS? Explain.
The global survey we learned about in Exercise 49 also asked respondents how they felt about the statement "I try to avoid eating fast foods." The random sample of 800 included 411 people 35 years...
In Minland in Problem 15, the interest rate is 4 percent a year. Suppose that real GDP decreases to $10 billion and the quantity of money supplied remains unchanged. Do people buy bonds or sell...
What is the difference between a cost and an expense?
The wind blows across a field with an approximate velocity profile as shown in Fig. P4.68. Use Eq. 4.16 with the parameter $b$ equal to the velocity to determine the momentum flowrate across the...
What were the threats for the InfoSys before they entered the "Building Tomorrow's Enterprise" phase? List opportunities that existed on a market for the InfoSys back then? Was the industry...
what is the youngs modulus of a strand of spaghetti with weight 1 gram and length of 2 5 cm
Blue Computers, a major server manufacturer in the United States, currently has plants in Kentucky and Pennsylvania. The Kentucky plant has a capacity of 1 million units a year, and the Pennsylvania...
4. If all the SAC's which had been INCURRED during the year 1995 had been expensed, illustrate how the 1995 income statement would have been affected (using after-tax dollar amounts). In your...
Should companies reshore more jobs that have been moved overseas? What are the pros and cons of doing so?
Do you believe that Hofstedes culture model is accurate? If not, what would you change to make it more useful in training people to work in a different culture?
Using the concepts of authority, responsibility, and accountability, can you explain what should happen to an individual who misuses company resources for personal gain? Provide an example.
Should tariffs and other trade barriers be increased in order to protect jobs in the home country? Why or why not?
Has affirmative action gone too far in creating a preference for historically underrepresented groups over other employees and applicants instead of treating everyone equally?
Seven Warning Signs of Cancer List the seven warning signs of cancer that you should educate individuals about when conducting a community service education program about cancer. B- Radiation...
In 1995 Miguel purchased a home for $130,000. In 2000 he sold it for $170,000 and immediately purchased another one for $180,000, which he sold in 2007 for $235,000. How much taxable capital gain, if...
What are the pros and cons of a firm merging with a rival firm?
On the competitive position (CP) axis of a SPACE Matrix, what level of capacity utilization would be necessary for you to give the firm a negative 1? Negative 7? Why?
What strategies do you believe can save newspaper companies from extinction?
Will the bulb in Figure Q22.2 light? Explain. + FIGURE Q22.2
Electroconvulsive therapy is a last-line treatment for certain mental disorders. In this treatment, an electric current is passed directly through the brain, inducing seizures. The total charge that...
When a current passes through the body, it is mainly carried by positively charged sodium ions (Na + ) with charge +e and negatively charged chloride ions (Cl - ) with charge -e. In a given electric...

The Market Risk Premium is calculated using the S&P 500. Explain why the S&P 500 is so

Question:

Expert Answer:

The SP 500 is used as the market portfolio to calculate the market risk premium in the US because it ... View the full answer

Strategic management concepts

Students also viewed these finance questions