risk premium

Tag: risk premium

Sharpe Ratio

See Also: Efficient Market Theory Effective Rate of Interest Calculation Coupon Rate Bond Discount Rate Federal Funds Rate Definition Sharpe Ratio Definition The sharpe ratio definition is the excess return or risk premium of a well diversified portfolio or investment per unit of risk. Measure sharpe ratio using standard deviation. You may also know this

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Risk Premium

See Also: Finance Beta Definition Hedging Risk Common Stock Preferred Stock Stock Options Risk Premium Definition Risk premium is any return above the risk-free rate. The risk-free rate refers to the rate of return on a theoretically riskless asset or investment, such as a government bond. All other financial investments entail some degree of risk,

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Capital Asset Pricing Model

See Also: Cost of Capital Cost of Capital Funding Arbitrage Pricing Theory APV Valuation Capital Budgeting Methods Discount Rates NPV Required Rate of Return Capital Asset Pricing Model (CAPM) The Capital Asset Pricing Model (CAPM) is an equilibrium model that measures the relationship between risk and expected return of an asset based on the asset’s

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