Market Risk Premium Law and Legal Definition

Market risk premium is the difference between the expected return on a market portfolio and the risk-free rate. It is a measure of the additional return needed, on average, to convince investors to invest in the stock market rather than in risk-free Treasury Notes. In other words, the premium is compensation for taking on additional risk. [Steiner Corp. v. Benninghoff, 5 F. Supp. 2d 1117, 1134 (D. Nev. 1998)].