Country Risk Premium: The Case of Chile

Zócimo Campos (), Juan Tapia Gertosio () and Paulina Natalia Gudaris ()

Revista Finanzas y Politica Economica, 2021, vol. 13, issue 2, 317-344

Abstract: Currently there is no agreed method to estimate the Risk Premium accurately, therefore, different authors arrive at significantly different results when calculating the risk premium for a given country or industry. This work estimates the risk premium of the Chilean stock market (PRM) for the period 1993-2020 using different estimation methodologies (Differential Returns, Implicit Return in Current Stock Prices). The results indicate, depending on the methodology used, a Premium for Risk that ranges between 1,91% and 10,28%, which shows the existence of a positive premium for assuming risk in Chile that ranges around 5,3%.

Keywords: Prize for risk; Profitability; Chile; Market; Financial Markets (search for similar items in EconPapers)
JEL-codes: G11 G14 G18 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:col:000443:019738

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