The market risk premium is one of the most important parameters in finance. Its value and the ways to calculate a risk premium for the market is a widely debated subject. This thesis examines numerous ways of calculating a risk premium for the Swedish market with regard to how good an estimation they make of a real risk premium. Estimations based on historical periods ranging from 20 to 85 years is calculated as well as a premium based on forward-looking estimates. The real risk premium is solved out for a selection of companies and an index with the help of CAPM. An examination of these estimates leads to the conclusion that historical estimates of a risk premium may be outdated. The implication of this is that more effort should be put into examining a risk premium based on forward-looking estimates. In this context a thorough analysis of fundamentals should be added into the calculation.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:sh-149 |
| Date | January 2005 |
| Creators | Lindén, Markus, Särnblom, Stellan |
| Publisher | Södertörns högskola, Institutionen för ekonomi och företagande, Södertörns högskola, Institutionen för ekonomi och företagande, Huddinge : Institutionen för ekonomi och företagande |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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