Riskikanta

Riskikanta, also known as risk premium or risk return, is a financial term that refers to the additional return an investor expects from an investment because it is subject to risk. It is the difference between the expected return of an investment and the risk-free rate of return. The risk-free rate is the return on an investment that is considered free of risk, such as a government bond.

The risk premium is determined by the level of risk associated with the investment. Higher risk investments typically have higher risk premiums, while lower risk investments have lower risk premiums. For example, a stock investment may have a higher risk premium than a bond investment because stocks are more volatile and subject to market fluctuations.

The risk premium is an important concept in finance because it helps investors understand the potential return of an investment and make informed decisions about where to allocate their capital. It is also used by financial analysts and investors to compare the performance of different investments and to determine the appropriate level of compensation for taking on risk.

In summary, riskikanta is a measure of the additional return an investor expects from an investment due to the risk associated with it. It is calculated as the difference between the expected return of the investment and the risk-free rate of return. The risk premium is an important concept in finance that helps investors understand the potential return of an investment and make informed decisions about where to allocate their capital.