formula directory logo

HOSTING A TOTAL OF 318 FORMULAS WITH CALCULATORS

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

Similar formulas which you may find interesting.