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Is the market risk premium a parameter

Is the market risk premium a parameter, for the world economy or for the national economy?

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No. This risk premium is the return differential (above the return which can be acquired by investing in government bonds) which an investor needs for stock market investment. This is not a characteristic parameter of an economy as everyone has his own risk premium. The average market risk premium value is unknown and this cannot be considered as being the one of a representative investor.

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