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What does risk premium mean?
1. Risk premium refers to the compensation for risk. This means that if investors take high risks, their potential returns should also match the risks. For example, if you invest 100 yuan, there is a 50% chance that you will lose it all, then investors should also have a 50% record to double the principal.

2. The risks and benefits of any investment should match each other. For example, when capital demanders issue bonds, if their financial situation is poor and the market determines that their default risk is high, the issuer will raise the bond interest rate and attract the market to buy; For example, investing in stocks, some people are prosperous, and some people lose everything.

3. The risk ranking of various major basic asset types in the market is from big to small. Options, futures stocks and bonds, among stocks, the risks faced by large-cap stocks and small-cap stocks are different in different industries and different sectors. In bonds, the main factor affecting the risk is the issuer's financial situation.