yes. most of the time they do...Higher the risk higher the return.
otherwise who would take risk , when you can get equivalent benefit without taking any risk.
for example government bonds, bank deposits that usually are considered risk free investments,
so defiantly there is some risk premium over risk free return for risky investment
An investor risks money in search of financial profits. Typically, the riskier the investment the higher the payoff will be for the investor.
Investing in penny stocks is one of the riskier behaviors that traders and investors may engage in within the greater stock market.
Nothing, but its coupon rate would likely decrease as it is now considered a riskier asset.
adjust the overall discount rate higher for the riskier project
as yield to maturity increases the bonds price decreases, because a higher yield to maturity means its riskier to investors
Investment becomes costlier, when funds are invested in a company with hollow promises and returns are thus meagre, in comparison to investments in a company of repute. Whereas savings in bank FD or LIC policies are far less riskier and the return or outcome is well know at the time of investment itself.
riskier
. They could take on bigger and riskier business ventures
The large majority of investment newsletters make their money through investor subscriptions. No one is going to pay for investment advice that is subpar and most investors know that many active fund managers underperform the return of the overall stock market. Accordingly there is a tendency for investment newsletters to recommend riskier investments in the hopes of hitting a home run to increase portfolio returns which can then be used in the newsletter's advertising to increase the subscriber base.
A type of mutual fund with the goal to generate current income for its investors from the premium it earns by selling option contracts. The profits investors earn on the options are taxed as ordinary income, not as dividends, so option income funds are best held in tax-advantaged accounts. This income generating strategy is much riskier than investing in dividend paying stocks, although the returns can be much higher. There are a number of online trading portals that can also help you out when trying to figure out Mutual Funds Jargon. Sites like Reliance Mutual Funds, money control, etc are very good.
A company that experiences an increase in its lending rates will be considered riskier. This is a signal to the market that the company is experienced difficulties raising debt cheaply (As cost of debt < cost of equity). This may even push up the cost of equity as risk averse investors may demand higher returns on equity. Overall - WACC has the potential to rise. If the company is unable to generate or atleast meet the WACC, the share price will be adversely affected and hit investor confidence.
The dealer's function is riskier because the dealer must maintain an inventory of the asset and honor quotes to buy and sell.