Stocks Return Rate
calculating the dividend yield?
I decided to prepare a research project to optimize the selection of the portfolio, then I can choose the Markowitz model for this problem, but one of the fundamental input data (parameters) the need for this model is the rate of return of capital, I need to return rates of about 40 towns of the best titles in 10 years a go, where I can find the rate of return on stocks this period time?
There are many ways to calculate the expected return. The easiest way is to use CAPM. To do this, you will need to obtain or calculate the beta. Return is equal to the risk-free rate plus beta times the market premium. For the risk-free rate, use the Treasury yield for the investment horizon. The market premium is quite high now (because of the crisis) – the 7.5% would be a good idea. There are other models – such as the Fama-French model – which are a little more sophisticated.
What is Rate of Return? Douglas Andrew of Missed Fortune explains (part3of3)