Risk free rate puzzle
by a relatively risk free US T-bill) is an order of magnitude greater than can be rationalized in the context of the standard neoclassical paradigm of financial economics. This regularity, dubbed “the equity premium puzzle,” has spawned a plethora of research efforts to explain it away. historical U.S. equity premium (the return earned by a risky security in excess of that earned by a relatively risk free U.S. T-bill) is an order of magnitude greater than can be rationalized in the context of the standard neoclassical paradigm of financial economics. This regularity, dubbed “the equity premium puzzle,” has spawned a plethora