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Abstract
This study examined the relationship between return on equity for individual Kansas farms and the S&P 500 using data from 1996 to 2018. Return on equity was measured with and without the inclusion of capital gains on land. Results indicated that return on equity with capital gains on land adjusted for risk was 1.2 percent above S&P returns during the period. For most of the farms in the sample, the risk faced by individual farms was not related to risk incorporated into the S&P 500 index, suggesting that there are opportunities for farm operations to diversify their risk by investing in the stock market.