Question: 1.What are the differences between a bond risk premium and an equity risk premium? 2. Explain whether risk premiums would be wider for stocks or

1.What are the differences between a bond risk premium and an equity risk premium?

2. Explain whether risk premiums would be wider for stocks or bonds in most cases.

3. Explain what happens to a risk premium if inflation is not accounted for and adjustments are not made for taxes.

4. Is the excess return that you expect to get by investing in a riskier asset guaranteed? Explain your answer.

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