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Tags: economy
Categories: Economics & Finance
The return over and above the risk free rate of return that an investor expects in exchange for each additional unit of risk. According to Markowitz portfolio theory, rational investors only accept additional risk if they expect a greater return. One refers to this greater return as the risk premium.
(source: http://financial-dictionary.thefreedictionary.com/Risk+Premium)
Synonyms:
sovereign risk
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