The Equity Premium in India

Rajnish Mehra

No 12434, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this article we examine the Equity Premium in the Indian context and review the related literature. The equity premium is the returned earned by a well-diversified stock portfolio in excess of that earned by a risk free security such as a Treasury Bill. Consistent with U.S. experience we find that the Indian equity premium has been quite high in the post 1991 period, averaging 9.7% above the corresponding risk free security. It is difficult to justify such a premium based on theoretical considerations. The article is an entry prepared for the Oxford Companion to Economics in India edited by Kaushik Basu

JEL-codes: E21 G1 G12 (search for similar items in EconPapers)
Date: 2006-08
New Economics Papers: this item is included in nep-cfn, nep-cwa, nep-fin, nep-fmk and nep-mac
Note: AP EFG IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published as Basu, Kaushik (ed.) Oxford Companion to Economics in India. Oxford University Press, 2007.

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