## Risk Premium

Risk premium, sometimes referred to as default risk premium, is the return on an investment minus the return that would be earned on a risk free investment. The risk premium is the amount that an investor would like to earn for the risk involved with a particular investment.

The US treasury bill (T-bill) is generally used as the risk free rate for calculations in the US, however in finance theory the risk free rate is any investment that involves no risk.

## $$a-f$$

a=assets or investment return.f=risk free return.

ENTER THE VARIABLES TO BE USED IN THE FORMULA