Banking Definition Risk Premium 
Musings on Markets
JANUARY 10, 2025
Thus, as you peruse my historical data on implied equity risk premiums or PE ratios for the S&P 500 over time, you may be tempted to compute averages and use them in your investment strategies, or use my industry averages for debt ratios and pricing multiples as the target for every company in the peer group, but you should hold back.
Valutico
FEBRUARY 27, 2024
For central banks like the Federal Reserve, it helps control the economy. They set this rate to affect how much money moves through banks and influences short-term interest rates. We are going to focus on how discount rates are used in the context of investment, rather than in the context of central banks.
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Musings on Markets
AUGUST 15, 2023
Risk Free Investments: Definition, Role and Measures The place to start a discussion of risk-free rates is by answering the question of what you need for an investment to be risk-free, following up by seeing why that risk-free rate plays a central role in corporate finance and investing and then looking at the determinants of that risk-free rate.
Simply Treasury
AUGUST 2, 2022
The idea is not new to encourage companies to increase their capitalization and reduce their bank debt (partly through more recourse to the capital market - CMU project). The rate would be calculated based on a 10-year "risk-free interest" rate depending on the currency, increased by a 1% risk premium (1.5%
Musings on Markets
MAY 24, 2021
Implicit in this definition are two key components of inflation. The first is that to define purchasing power, you have to start with a definition of what you are purchasing, and this detail, as we will see, can lead to differences in inflation measured over a given period, across measures/services.
Musings on Markets
JANUARY 27, 2021
In my last post , I described the wild ride that the price of risk took in 2020, with equity risk premiums and default spreads initially sky rocketing, as the virus led to global economic shutdowns, and then just as abruptly dropping back to pre-crisis levels over the course of the year. against developed market currencies.
Musings on Markets
JULY 1, 2022
In this post, I will argue that almost everything that we are observing in markets, across asset classes, can be explained by a pull back on risk capital, and that understanding the magnitude of the pull back, and putting in historical perspective, is key to gauging what is coming next. Risk Capital: What is it?
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