Risk premium, Risk Management

Risk Premium

A risk premium is the extra or excess which is return on a risky asset relative to the return on risk-free assets. Therefore, it defines the additional return that an investor can expect to obtain by accepting a largest amount of risk. Since there are many kinds of risky assets each asset commands a several risk premium. As a general rule the riskier a particular asset is the greater the risk premium that investors will needed to be an investor in that privacy.

Posted Date: 10/16/2012 7:39:13 AM | Location : United States

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