Here we use a 10-year time period. To calculate an asset's expected return, start with a risk-free rate (the yield on the 10-year Treasury), then add an adjusted premium. The adjusted premium ...

To calculate the Sharpe ratio, you first need your portfolio's rate of return. Next, you need the rate of a risk-free investment, such as Treasury bonds. Subtract this risk-free rate from your ...

Calculation and Application The market risk premium can be calculated by subtracting the risk-free rate from the expected equity market return, providing a quantitative measure of the extra return ...