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Risk Premium Calculator

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✖Return on investment (ROI) is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment.ⓘ Return on Investment (ROI) [ROI]			+10% -10%
✖Risk Free Return is the theoretical rate of return attributed to an investment with zero risk.ⓘ Risk Free Return [Rf_return]			+10% -10%

✖Risk Premium is the return in excess of the risk-free rate of return investment is expected to yield.ⓘ Risk Premium [RP]

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Risk Premium Solution

STEP 0: Pre-Calculation Summary

Formula Used

Risk Premium = Return on Investment (ROI)-Risk Free Return
RP = ROI-Rf_return
This formula uses 3 Variables

Variables Used

Risk Premium - Risk Premium is the return in excess of the risk-free rate of return investment is expected to yield.
Return on Investment (ROI) - Return on investment (ROI) is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment.
Risk Free Return - Risk Free Return is the theoretical rate of return attributed to an investment with zero risk.

STEP 1: Convert Input(s) to Base Unit

Return on Investment (ROI): 50000 --> No Conversion Required
Risk Free Return: 12 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

RP = ROI-Rf_return --> 50000-12

Evaluating ... ...

RP = 49988

STEP 3: Convert Result to Output's Unit

49988 --> No Conversion Required

FINAL ANSWER

49988 <-- Risk Premium

(Calculation completed in 00.004 seconds)

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< Important Formulas of Investment Calculators

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Capital Gains Yield

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Risk Premium

LaTeX Go Risk Premium = Return on Investment (ROI)-Risk Free Return

Risk Premium Formula

LaTeX Go

Risk Premium = Return on Investment (ROI)-Risk Free Return
RP = ROI-Rf_return

How to Calculate Risk Premium?

Risk Premium calculator uses Risk Premium = Return on Investment (ROI)-Risk Free Return to calculate the Risk Premium, Risk Premium is the return in excess of the risk-free rate of return investment is expected to yield. Risk Premium is denoted by RP symbol.

How to calculate Risk Premium using this online calculator? To use this online calculator for Risk Premium, enter Return on Investment (ROI) (ROI) & Risk Free Return (Rf_return) and hit the calculate button. Here is how the Risk Premium calculation can be explained with given input values -> 49988 = 50000-12.

FAQ

What is Risk Premium?

Risk Premium is the return in excess of the risk-free rate of return investment is expected to yield and is represented as RP = ROI-Rf_return or Risk Premium = Return on Investment (ROI)-Risk Free Return. Return on investment (ROI) is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment & Risk Free Return is the theoretical rate of return attributed to an investment with zero risk.

How to calculate Risk Premium?

Risk Premium is the return in excess of the risk-free rate of return investment is expected to yield is calculated using Risk Premium = Return on Investment (ROI)-Risk Free Return. To calculate Risk Premium, you need Return on Investment (ROI) (ROI) & Risk Free Return (Rf_return). With our tool, you need to enter the respective value for Return on Investment (ROI) & Risk Free Return and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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