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If the Stock Market Return in 2014 Turns Out to Be

question 19

Essay

If the stock market return in 2014 turns out to be 18%, what will happen to our estimate of the "normal" risk premium? Does this make sense?


Definitions:

Braided Stream

A stream or river with an interconnecting network of branching and reuniting shallow channels.

Constant Flow

A steady, uniform rate of movement or supply.

Meander Scars

Erosional features left in the landscape by the remnants of ancient river meanders.

Oxbow Lakes

Crescent-shaped lakes formed when a river meander is cut off from the main stream.

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