Risk Premium

kianhon · Newbie Joined: 08 Jun 2008 Posts: 3

I wonder how you calculate Risk Premium? I know this question might sound stupid but I hope someone can clarify it for me.

1)Is Risk Premium different for each Indexes, industry sector and capitalization of a stock (i.e large cap, small cap stock.....) ??

2)How or where I can calculate or get the number? Assume that I'm talking about U.S market.

diesel · Posted: Thu Oct 02, 2008 12:16 am Post subject:

Here you go....

http://www.investopedia.com/articles/04/020404.asp
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kianhon · Newbie Joined: 08 Jun 2008 Posts: 3

errrr..so how I can get the number? Laughing

diesel · Posted: Wed Oct 01, 2008 5:36 am Post subject:

1) Yes
2) You can either make a bunch of assumptions about the future (macro analysis i.e. Henry) or you can use mathematical models based on back testing (program trading i.e. Bill).
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All cats are gray in the dark.