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)
- 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.
- 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
| plural | risk premiums |
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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
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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Cite this entry: “risk premium.” Word.ws, https://word.ws/risk_premium. Based on Wiktionary, CC BY-SA 4.0.
