Which of the Following Statements Concerning the Equity Risk Premium

question 43

Multiple Choice

Which of the following statements concerning the equity risk premium is true?

• A)Some scholars think it is too low
• B)There is no direct way to measure it
• C)It predicts high future returns on stocks
• D)It is expected to increase in the future

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Definitions:

Earnings Per Share

A measure of a company's profitability that calculates how much of the net income is available per share of stock.

Year 2

Refers to the second year of a particular time frame, often used in financial analysis to denote the second year of operations, investments, or accounting periods.

Price-Earnings Ratio

A valuation metric comparing the current share price of a company to its per-share earnings.

Year 2

A reference to the second year in a time series analysis or the second year of a company's operations or financial reporting.