A risk premium is the return over and above the risk-free rate (generally thought of as the return on U.S. Treasuries) that investors demand to compensate them for the risk of owning an asset. Because ...

Investors demand higher returns from illiquid assets due to greater selling difficulty. Liquidity premium can be calculated by comparing yields of similar liquid and illiquid bonds. Real risk-free ...

Benzinga explains the various measures used by smart investors to measure risk and return more accurately. Investing is about getting the most bang for your buck. Average investors chase high returns, ...

The risk-free rate is the rate of return offered by an investment that carries zero risk. Every investment asset carries some level of risk, however small, so the risk-free rate is something of a ...

Every thriving business relies on a robust return on investment (ROI) to help gauge whether its investments are yielding a profit. Although you as an individual investor possess shallower pockets than ...

Downside risk refers to the potential for an investment to decrease in value. Unlike general risk, which considers both upward and downward price movements, downside risk focuses solely on the ...

High risk-adjusted returns suggest efficient performance for the invested capital. Low risk-adjusted returns indicate potentially suboptimal investments. Comparing risk-adjusted returns helps select ...

The risk/reward ratio or risk/return ratio is a commonly used metric in trading that compares the potential profit of a trade with the potential loss. That said, it’s the reward traders stand to make ...