Question
One of the disadvantages of using historical returns to estimate the market risk premium is that the past may not be a good guide to the future Blank______.
Multiple choice question.
when economic conditions change quickly
ever
when economic conditions are relatively stable
Multiple choice question.
when economic conditions change quickly
ever
when economic conditions are relatively stable
Answers
GPT-4o mini
The correct answer is:
**when economic conditions change quickly**.
Using historical returns assumes that future market conditions will resemble those of the past, which may not hold true in rapidly changing economic environments.
**when economic conditions change quickly**.
Using historical returns assumes that future market conditions will resemble those of the past, which may not hold true in rapidly changing economic environments.