market risk premium

market risk premium
market risk premium UK US noun [C] (also market premium) FINANCE
the extra amount of money an investor can make by investing in financial products that have more risk: »

The market risk premium is only worth it for most investors if you've got a lot to invest and won't be hurt by setbacks.


Financial and business terms. 2012.

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Look at other dictionaries:

  • Market Risk Premium — The difference between the expected return on a market portfolio and the risk free rate. Market risk premium is equal to the slope of the security market line (SML), a capital asset pricing model. Three distinct concepts are part of market risk… …   Investment dictionary

  • market-risk premium — See: risk premium …   Accounting dictionary

  • risk premium — market risk premium 1) The difference between the expected rate of return on an investment and the risk free rate of return over the same period. If there is any risk element at all, the rate of return should be higher than if no risk were… …   Big dictionary of business and management

  • risk premium — market risk premium The difference between the expected rate of return on an investment and the risk free rate of return (e.g. on a government stock) over the same period. If there is any risk element at all, the rate of return should be higher… …   Accounting dictionary

  • Risk premium — A risk premium is the minimum amount of money by which the expected return on a risky asset must exceed the known return on a risk free asset, in order to induce an individual to hold the risky asset rather than the risk free asset. Thus it is… …   Wikipedia

  • Risk premium — The reward for holding the risky market portfolio rather than the risk free asset. The spread between Treasury and non Treasury bonds of comparable maturity. The New York Times Financial Glossary * * *    The extra reward required from an… …   Financial and business terms

  • risk premium — The reward for holding the risky market portfolio rather than the risk free asset. The spread between Treasury and non Treasury bonds of comparable maturity. Bloomberg Financial Dictionary The expected additional return for making a risky… …   Financial and business terms

  • Equity Risk Premium — The excess return that an individual stock or the overall stock market provides over a risk free rate. This excess return compensates investors for taking on the relatively higher risk of the equity market. The size of the premium will vary as… …   Investment dictionary

  • Equity Risk Premium —    The extra return that the overall stock market or a particular stock must provide over the rate on Treasury bills to compensate for market risk. Treasury bills are regarded as risk free because they are guaranteed by the government …   Financial and business terms

  • Country Risk Premium - CRP — The additional risk associated with investing in an international company rather than the domestic market. Macroeconomic factors such as political instability, volatile exchange rates and economic turmoil causes investors to be wary of overseas… …   Investment dictionary

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