The ________ is an additional return beyond the risk-free rate that can be earned from a deposit guaranteed by the government.

Question

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The risk premium is the additional return that an investor demands for taking on risk. In this case, the risk-free rate refers to the return that an investor can earn from a deposit that is guaranteed by the government, such as a Treasury bond. The risk premium would be the additional return that an investor would demand for taking on more risk than just a risk-free investment.

The ________ Is an Additional Return Beyond the Risk-Free Rate