risk premium definition

risk premium

Acquisitions: Estimated portion of the purchase price of an asset or firm assumed as the market (systemic) risk inherent in the purchase.

Investing: (1) Difference between a risk-free return (such as from government bonds) and the total return from a risky investment (such as equity stock). (2) Additional return or rate of interest (above the market interest rate) an investor requires for investing in a proposition or venture. Also called price of risk. See also price of time.

risk premium is in the Investing and Purchasing & Procurement subjects.

risk premium appears in the definitions of the following terms: risk diversification, price of risk, technology valuation and risk adjusted discount rate

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