Relationship Between Returns On Asset Classes

Question 1

Required return

Answer 1

Required risk-free rate of return + expected inflation + risk premium

Question 2

Expected return

Answer 2

Initial income yield + expected capital growth
Initial income yield + income growth + impact of change in yield

Question 3

Require return

Answer 3

Real risk free rate + equity risk premium

Question 4

Expected return

Answer 4

Gross dividend yield + real dividend growth