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PremiumIn the context of insurance, a premium is the regular sum you pay to keep your cover in force.PremiumThe 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.Similar MatchesPremium bondsPremium bondsSee: 'National Savings'. Call premiumCall premiumPremium in price above the par value of a bond or share of preferred stock that must be paid to holders to redeem the bond or share of preferred stock before its scheduled maturity date. Tender offer premiumTender offer premiumThe premium offered above the current market price in a tender offer. Risk premiumRisk premiumThe 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. Bond premiumBond premiumSee: Bond discount Further Suggestionslife assurance premium reliefPercentage premium Indemnity Guarantee Premium Premium bond option premium waiver of premium insurance premium equity risk premium Single Premium Deferred Annuity (SPDA) Waiver of premium Conversion premium Liquidity premium Term premiums Forward premium Premium income Fixed premium Single premium life insurance Default premium insurance premium tax Risk premium approach Insurance premium High premium convertible debenture warrant premium Option premium Risk premium |
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