Estimating the equity risk premium—the return on stocks over a “safe” asset such as the 10-year Treasury or 3-month T-bill—is at the heart of investment research and portfolio analysis. “It is the ‘number’ that drives everything we do,” writes Aswath Damodaran, a finance professor at the Stern School of Business at NYU. The premium “depends strictly on expectations for the future because the investor’s returns depend only on the investment’s cash flows,” advise the authors of the CFA Institute’s Equity Asset Valuation