This chapter elaborates on equity risk premium (ERP), which is the difference between the returns that investors receive from equities and that which is available on less risky assets such as government bonds or bank deposits. It shows how different “the returns on equities” can be from “the returns from equity portfolios.” After a period of good or bad returns, average returns will still be the most likely returns in the future. Under that assumption, the returns on investors’ equity portfolios will not be affected by the incidence of cash withdrawals needed to pay interest on the debt which has been borrowed to leverage the equity portfolio. When returns exhibit negative serial correlation the situation is very different. The “return on equities” is unaffected by the withdrawals; however, the return on equity portfolios financed partly by debt is heavily affected. The same applies to equity portfolios from which withdrawals are made for purposes other than the payment of interest.