Investing & Markets

Own assets that compound

Novice

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Novice

Note. Education, not financial advice. Past performance doesn't guarantee future returns. For real money decisions, talk to a SEBI-registered advisor whose incentives don't depend on selling you a product.

Concept 11 of 21

framework

Risk premium

The bonus return you earn for taking on uncertainty instead of parking cash in a safe rate.

Definition

The extra return investors demand above a safe rate to hold a riskier asset.

Step 1

Predict first

In one or two sentences, what do you think this concept means? Wrong is fine; the small struggle is what makes the answer stick.