riskpremiumer
Riskpremiumer is a term used in finance and economics to describe the additional return an investor expects to receive for taking on a higher level of risk. This concept is fundamental to understanding investment decisions and asset pricing. Essentially, investors are generally risk-averse, meaning they prefer a certain outcome over an uncertain one of the same expected value. Therefore, to persuade them to invest in assets with greater uncertainty or potential for loss, these assets must offer a higher expected return. This excess return is the risk premium.
The size of the risk premium depends on various factors, including the perceived riskiness of the investment,
In practice, the risk premium is not a fixed or guaranteed amount. It is an expected or