Equity Risk Premium

CFA Level II Equities
#1

It is a silly question but there is different terminologies of equity risk premium;

  1. What I have learnt is that it equates (beta*(mrkt risk-risk free)

  2. Schweser some times use the equity risk premium for (mrkt risk-risk free)

#2

Your first point is not the equation for the equity risk premium, it is actually the expected return. The equity risk premium is solely the expected market return minus the risk free rate.

#3

What I am trying to say is equity premium equal mrkt return -risk free return or is it equal to beta(mrkt return-risk free return)

#4

It’s market return less risk free rate