Us equity premium

The US equity premium refers to the excess return that investors can expect to earn from investing in US stocks compared to risk-free investments such as government bonds or treasury bills. This premium is typically measured as the difference between the average annual return of US stocks and the risk-free rate over a certain period of time. The US equity premium is often used as a benchmark for evaluating the performance of equity markets and assessing the risk and return trade-off of equity investments. Over the long term, the US equity premium has historically been positive, indicating that equity investments have generated higher returns than risk-free investments. However, the premium can vary widely over shorter time periods and is subject to fluctuations due to market conditions and other factors.