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Risk premium |
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Risk premium1. The higher expected return (in the sense of mathematical expected value) that an uncertain asset must pay in order for risk averse investors to be willing to hold it. 2. The difference between the interest rate on a risky asset and that on a safe one. 3. In exchange markets the difference between the forward rate and the expected future spot rate.Risk 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.Risk premium Similar MatchesInsurance premiumInsurance premiumPayments calculated by the insurance company based on risk factors that must be made by the insured to guarantee protection of property loss under an insurance policy. Single Premium Deferred Annuity (SPDA)Single Premium Deferred Annuity (SPDA)An IRA-like annuity into which an investor makes a lump-sum payment that is invested in either a fixed-return instrument or a variable-return portfolio, which is taxed only when distributions are taken. High premium convertible debentureHigh premium convertible debentureA bond with a long-term, high-premium, common stock conversion feature. It also offers a competitive interest rate. This type of investment vehicle is aimed at bond investors who want to be able to convert into stock to hedge against inflation. Risk premium approachRisk premium approachA common approach for tactical asset allocation to determine the relative valuation of asset classes based on expected returns. Default premiumDefault premiumA differential in promised yield that compensates the investor for the risk inherent in purchasing a corporate bond that entails some risk of default. Further Suggestionslife assurance premium reliefPremium single premium life insurance option premium Term premiums Call premium Indemnity Guarantee Premium Conversion premium Bond premium Unamortized premiums on investments Forward premium Premium bond Forward premium Waiver of premium Tender offer premium Fixed premium equity risk premium Premium income Option premium insurance premium tax insurance premium warrant premium premium bonds Single premium life insurance waiver of premium |
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