Please enable JavaScript.
Coggle requires JavaScript to display documents.
relationships between returns on asset classes (formulae (expected return,…
relationships between returns on asset classes
formulae
required return
risk-free real return + expected inflation + risk premium
expected return
initial income yield + expected capital growth or
initial income yield + income growth + impact of change in yield
equities
dividend yield + expected nominal dividend growth
conventional bonds
GRY (nominal)
index-linked bonds
GRY (real)
property
rental yield + expected nominal rental growth
cash
short-term nominal interest rates
theoretical factors that the total returns on different asset classes are expected to move in line with
equities
GDP
wages