Its that time again...time to update the Market Risk Premium of the ASX.
It's been a crazy time on the markets since April so I expect a drop.
Using the same methodology as always (average daily returns over the last 2.5 years), we have a market return (capital) of just 0.52% (pretty ordinary). Adding on the average Divident yield over that same period of 4.61% gives a grand total for Market Return of 5.13% (down from the April Figure by 2.64%...ouch)
Subtract the average 10 year Australian Government Bond rate over that period of 3.98% (again down by around 0.2%) and we get a Market Risk Premium of 1.15% (a drop of 2.6%)
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