Market risk premium: Difference between revisions
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* [[Equity risk premium]] | * [[Equity risk premium]] | ||
* [[Market risk]] | * [[Market risk]] | ||
* [[Premium]] | |||
* [[Risk-free rate of return]] | |||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
[[Category:Financial_products_and_markets]] | [[Category:Financial_products_and_markets]] | ||
Revision as of 17:57, 29 December 2022
(MRP).
In the Capital Asset Pricing Model, the additional return to investors who invest in the market portfolio - additional to the theoretical risk free rate of return - which compensates them for accepting an average market level of risk.
Also known loosely as the Equity Risk Premium (ERP).
But more strictly the market risk premium refers to the market of all traded assets, while the equity risk premium refers to equities only.
