Risk premium

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Revision as of 16:09, 26 July 2015 by imported>Doug Williamson (Create the page. Source: IFRS 13, page A631.)
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For financial reporting and fair valuation purposes, risk premium is defined as compensation sought by risk-averse market participants for bearing the uncertainty inherent in the cash flows of an asset or a liability.


This is a similar concept to market risk premium in the Capital asset pricing model.


See also