Short-term consequences of long-term risk

Estimates of the equity risk premium suggest higher levels of uncertainty in equities markets, despite the fact daily VIX risk levels have declined. Risk managers need to confront the tension between short-term risk levels and long-term macroeconomic uncertainties. This MSCI research prescribes the need for risk managers and investors to make fuller use of a valuation framework in order to gain insight into the short-term consequences of long-term risk.

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