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Which of the following statements ARE corect? There are more than one answers. Select one or more: a. The market risk premium is the difference
Which of the following statements ARE corect? There are more than one answers. Select one or more: a. The market risk premium is the difference between the expected return of the market portfolio and the risk free rate b. All else equal, when average investors become more risk averse, the market risk premium will increase. c. All else equal, when the market volatility decreases, the market risk premium will increase. d. If the market risk premium is 5% and the risk-free rate is 1%, the expected return of the market would be 6%. e. If the market variance is 3.5% and the average investor risk aversion is 2, the market risk premium would be 7%. REITE Unte TFITS LES
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