Session 4: Risk free Rates and Equity Risk Premiums

We started the class with a discussion of risk free rates, exploring why risk free rates vary across currencies and what to do about really low or negative risk free rates. The blog post below captures my thoughts on negative risk free rates:
http://aswathdamodaran.blogspot.com/2...
We just started on the discussion of equity risk premiums but the contours of the discussion should be clear.Historical equity risk premiums are not only backward looking but are noisy (have high standard errors). You can the historical return data for the US on my website by going to
http://www.stern.nyu.edu/~adamodar/Ne...
Click on current data, and look to the top of the table of downloadable data items. Finally, The post class test and solution are attached. We also embarked on assessing country risk. I won’t drown you in the details, but you should also be able to look up equity risk premiums by country at the data link.
Start of the class test: http://www.stern.nyu.edu/~adamodar/pd...
Slides: http://www.stern.nyu.edu/~adamodar/po...
Post class test: http://www.stern.nyu.edu/~adamodar/pd...
Post class test solution: http://www.stern.nyu.edu/~adamodar/pd...