The validity and time-horizon of the Fed model for equity valuation: a co-integration approach
Investors do arbitrage between bonds and stocks. The so-called “Fed model” asserts that comparing the level of the earnings yields of stocks to the nominal government bond yields is relevant when assessing the relative values of the two asset classes, and their prospective returns. A conceptual p...
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| Format: | Article |
| Language: | English |
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University of Warsaw
2015-03-01
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| Series: | Journal of Banking and Financial Economics |
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| Online Access: | https://jbfe.wz.uw.edu.pl/resources/html/article/details?id=198254 |