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单词 Equity Premium Puzzle (EPP)
释义

Equity Premium Puzzle (EPP)
An phenomenon that describes the anomalously higher historical real returns of stocks over government bonds. The equity premium, which is defined as equity returns less bond returns, has been about 6% on average for the past century. It is supposed to reflect the relative risk of stocks compared to "risk-free" government bonds, but the puzzle arises because this unexpectedly large percentage implies a suspiciously high level of risk aversion among investors.

Investopedia Says:
The equity premium puzzle is a mystery to financial academics. According to some academics, the difference is too large to reflect a "proper" level of compensation that would occur as a result of investor risk aversion; therefore, the premium should actually be much lower than the historic average of 6%.

More recent extensions to the puzzle attempt to offer a different rationale for explaining the EPP, such as investor prospects and macroeconomic influences. No matter the explanation, the fact remains that investors are being rewarded very well for holding equity compared to government bonds.

Related Terms:
Capital Asset Pricing Model - CAPM
Consumption Capital Asset Pricing Model - CCAPM
Equity Risk Premium
Expected Return
Gambler's Fallacy
Real Rate Of Return
Risk Averse
Risk-Free Rate Of Return
Risk-Free Rate Puzzle - RFRP
Risk-Return Tradeoff

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更新时间:2025/1/22 18:45:48