Market risk premium
Market risk premium, RPM, is the difference between the expected return on the market and the risk-free rate.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Market risk premium, RPM. The difference between the expected return on the market and the risk-free rate.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Market risk premium, RPM. The additional return over the risk-free rate needed to compensate investors for assuming an average amount of risk.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
