Golden puzzle box held by a phoenix: A metaphor for the Equity Premium Puzzle, its historical significance and enduring mystery.

The Enigma of the Equity Premium Puzzle: Historical Outperformance of Stocks over Treasury Bills

Introduction to the Equity Premium Puzzle (EPP) The equity premium puzzle (EPP), first documented by Rajnish Mehra and Edward C. Prescott in 1985, refers to the intriguing phenomenon of excessively high historical outperformance of stocks over Treasury bills. Theoretically, the difference between stock returns and the return on risk-free Treasury

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