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Basic Question 1 of 8

What is the primary focus of the historical approach to estimating the equity risk premium (ERP)?

A. Future market expectations
B. Current stock prices
C. Past market data
D. Expected cash flows

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Edward Liu

Edward Liu

Learning Outcome Statements

explain historical and forward-looking approaches to estimating an equity risk premium;

CFA® 2025 Level II Curriculum, Volume 3, Module 18.