You are estimating the ERP for an emerging market. The following information has been collected: the risk premium of the U.S. equity market is 5.5%, the sovereign CDS spread for the emerging market is 2%, and the emerging equity market is about 1.3 times more volatile than the emerging government bond market. what is the emerging market’s ERP using the combined method?

a. 2.6%

b. 7.5%

c. 7.15%

d. 8.1%

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In Problem 3, Sec. 34, the functions uo = y, were shown to satisfy Laplace's equation and the homogeneous boundary conditions where un = Uxx (x, y) + Uyy (x, y) = 0 Ao 160 = 1/1/72 66² f(x) dx, 2π 0 sinh ny cos nx ux (0, y) = ux(л, y) = 0, u(x, 0) = 0. After writing u = X(x)Y(y) and separating variables, use the solutions of the Sturm- Liouville problem (1) in Sec. 35 to show how the functions up and un (n = 1, 2, ...) can be discovered. Then, by proceeding formally, derive the following solution of the bound- ary value problem that results when the nonhomogeneous condition u(x, 2) = f(x) is included: u(x, y)=Ao y+) A, sinh ny cos nx, n=1 An = 2 7 So (n=1,2,...) π sinh 2n (0 < x < л, 0 < y < 2) f(x) cos nx dx (n=1,2,...). In Problem 3, Sec. 34, the functions uo = y, were shown to satisfy Laplace's equation and the homogeneous boundary conditions where un = Uxx (x, y) + Uyy (x, y) = 0 Ao 160 = 1/1/72 66² f(x) dx, 2π 0 sinh ny cos nx ux (0, y) = ux(л, y) = 0, u(x, 0) = 0. After writing u = X(x)Y(y) and separating variables, use the solutions of the Sturm- Liouville problem (1) in Sec. 35 to show how the functions up and un (n = 1, 2, ...) can be discovered. Then, by proceeding formally, derive the following solution of the bound- ary value problem that results when the nonhomogeneous condition u(x, 2) = f(x) is included: u(x, y)=Ao y+) A, sinh ny cos nx, n=1 An = 2 7 So (n=1,2,...) π sinh 2n (0 < x < л, 0 < y < 2) f(x) cos nx dx (n=1,2,...).

Answer rating: 100% (QA)

d 81 calculations The sovereign CDS sprea... View the full answer