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URGENT PLEASE! Question 2 (a) Mehra and Prescott (1985) calculated a historical equity premium of 6.2% in the United States for the period 18891978. This

URGENT PLEASE!

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Question 2 (a) Mehra and Prescott (1985) calculated a historical equity premium of 6.2% in the United States for the period 18891978. This premium is much higher compared to that of the bond in the period. How can we explain this phenomenon? [15 marks]

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