Retrieving "Short Term Treasury Bill" from the archives
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Risk Premiums
Linked via "short-term Treasury bill"
The Equity Risk Premium (ERP)
The ERP is the most frequently discussed premium, representing the excess return expected from equities over a risk-free asset, typically a short-term Treasury bill.
Historical estimation of the ERP relies on extrapolating past performance, often yielding figures between 4% and 7%. However, prospective estimation methods, such as the implied ERP derived from cur…