riskipreemiot

Riskipreemiot, or risk premia, are the excess returns that investors demand for bearing risk beyond a risk-free rate. They reflect compensation for uncertainty about future cash flows and for exposure to various risk factors. In practice, they are often measured as the expected or realized excess return of a risky asset over a risk-free asset.

Key sources include the equity risk premium, the term premium, the liquidity premium, and the credit risk premium. Currency risk and sovereign risk can also generate premia, which can vary across markets and over time.

Risk premia are central to asset pricing. The equity risk premium is a core input in models like the capital asset pricing model and is also examined in multi-factor frameworks. Some investment strategies seek to harvest premia by targeting systematic risk factors.

Empirical estimates of premia differ by country and period, and are sensitive to methodology. While some long-run estimates for developed markets place the equity risk premium in the low to mid single digits per year, estimates are unstable and time-varying.

Critics highlight estimation challenges, regime shifts, and the possibility that observed premia reflect risk mispricing or behavioral effects. The study of risk premia informs debates around the equity premium puzzle and the pricing of risk in financial markets.