The rate of return that financial investors require to hold a risky asset minus the rate of return on a safe asset is called the Option(c) risk premium.
Risk premiums are higher rates of return you can expect to earn from riskier assets such as stocks as opposed to government bonds.
Investing involves a risk, or chance, that your investment will underperform and lose money. There are many reasons why share prices might fall dramatically, such as mismanagement by the issuer, poor financial performance, or market conditions in general.
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