Bond premiumSee: Bond discount
In the context of insurance, a premium is the regular sum you pay to keep your cover in force.
Risk premium approachRisk premium approach
A common approach for tactical asset allocation to determine the relative valuation of asset classes based on expected returns.
The extra amount you pay for a security over and above its intrinsic value. For example: Warrants: the premium on a warrant is calculated as the price of the warrant minus the difference between the exercise price and the price of the underlying asset. So if a warrant costing 8p gives you the right to buy a share at 75p, and that share was currently trading at 70p, the premium would be 3p (8-5). Investment trusts: the premium is the amount by which the share price of the investment trust exceeds its net asset value per share. e.g. If the Net Asset Value is £3.00, and the share price of the trust is £3.30, the trust is trading at a 10% premium to its NAV. In the more common situation where the share price is below the net asset value, the trust is said to be trading at a discount.
Indemnity Guarantee PremiumIndemnity Guarantee Premium
Additional one-off fee paid to the lender to protect them against the borrower defaulting. Independent Financial Advisor In theory, these intermediaries should look at the entire financial market before making a selection and offer unbiased advice and access to all suitable financial products. they sometimes still have access to special deals not on offer elsewhere because they may subscribe to a mortgage panel along with other advisers and brokers. Together they convince lenders to provide special packages in return for their continued custom. The only trouble is that they have to deliver a certain level of business over a year to remain on the panel, so they may favour some products over others.
Risk premiumRisk premium
The reward for holding the risky equity market portfolio rather than the risk-free asset. The spread between Treasury and non-Treasury bonds of comparable maturity.
Further SuggestionsPremium bond
Single premium life insurance
High premium convertible debenture
Tender offer premium
life assurance premium relief
Unamortized premiums on investments
single premium life insurance
Waiver of premium
Single Premium Deferred Annuity (SPDA)
equity risk premium