The "equity premium" refers to
A)the exemption of stock dividends from federal income tax.
B)the gap between the return on stocks and the return on bonds.
C)the premium investors are willing to pay for Internet stocks.
D)the low mortgage rates available to borrowers who make large down payments when purchasing a home.

Question

Quizplus · Accepted Answer

The equity premium refers to the difference, or gap, between the return on stocks and the return on bonds. This is important for investors to consider when deciding how to allocate their portfolio between stocks and bonds.

The "Equity Premium" Refers to