Ex-ante equity risk premia: Expectational estimates using stock market returns forecasts in the emerging equity market

Ex-ante equity risk premia: Expectational estimates using stock market returns forecasts in the emerging equity market

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We estimated the michael harris ii headband ex-ante equity risk premium for the Republic of Macedonia, which is a young, small and open emerging market.We polled academics and practitioners for their expectations on the stock market index MBI10 as a proxy for market portfolio.The risk premium is the expected MBI10 return relative to a government bond yield.Using the Kolmogorov-Smirnov and Anderson- Darling goodness-of-fit tests we determined the best fitted statistical distribution, and consequently estimated the short-term ERP of 8.

55 and long-term average ERP for volleyball replacement net the next 10 years of 7.76.The estimated ex-ante ERP is higher and similar as it is in the other emerging markets.