Word.ws English Dictionary

risk premium

risk premium noun: the return on investment in excess of the (theoretical) risk-free rate of return that an investment is expected to yield: the extra benefit that an investor either gets or hopes to get in exchange for taking a risk. (Often measured by proxy measures such as aggregate corporate earnings compared with interest rates on certain benchmark bonds that stand in for risk-free securities.).

Noun

risk premium (plural risk premiums)

  1. (investing) The return on investment in excess of the (theoretical) risk-free rate of return that an investment is expected to yield: the extra benefit that an investor either gets or hopes to get in exchange for taking a risk. (Often measured by proxy measures such as aggregate corporate earnings compared with interest rates on certain benchmark bonds that stand in for risk-free securities.)
    • The risk premium of equities can turn negative according to proxy measures, as has often occurred over the decades.
    1. (investing) An increase in the interest rate of a bond or loan according to the financial risk.
      • The loan shark added another 10% as the risk premium for an especially dubious borrower.

Forms of risk premium

pluralrisk premiums

Questions about risk premium

What does risk premium mean?
Risk premium means the return on investment in excess of the (theoretical) risk-free rate of return that an investment is expected to yield: the extra benefit that an investor either gets or hopes to get in exchange for taking a risk. (Often measured by proxy measures such as aggregate corporate earnings compared with interest rates on certain benchmark bonds that stand in for risk-free securities.).
What part of speech is risk premium?
Risk premium is a noun.
What is the plural of risk premium?
The plural of risk premium is risk premiums.

Words near risk premium in the dictionary

  1. risk off
  2. risk on
  3. risk one's life
  4. risk one's life and limb
  5. risk one's neck
  6. risk premium
  7. risk premiums
  8. risk production
  9. risk profile
  10. risk profiles
  11. risk societies

Source and license

Adapted from Wiktionary: risk premium (page history and authors). Text available under the Creative Commons Attribution-ShareAlike 4.0 license. Word.ws reformatted the entry and added links. Wiktionary data of 2026-09-02.

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