A short sale. Because when you short sell a stock, its value can raise an unlimited amount and you will be liable to cover it eventually.
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maturity risk premium
Banks are currently using 8% market risk premium. Data as of Feb, 2013.
yes
equity risk premium
Premium Investment Grade is the highest credit rating.Prime Investment Grade: No Risk of DefaultRating AgencyRatingS&PAAAMoodyAaaFitchAAA
Premium Investment Grade is the highest credit rating.Prime Investment Grade: No Risk of DefaultRating AgencyRatingS&PAAAMoodyAaaFitchAAA
Premium Investment Grade is the highest credit rating.Prime Investment Grade: No Risk of DefaultRating AgencyRatingS&PAAAMoodyAaaFitchAAA
The market risk premium is measured by the market return less risk-free rate. You can calculate the market risk premium as market risk premium is equal to the expected return of the market minus the risk-free rate.
maturity risk premium
Risk premium is the compensation investors expect to earn in return for taking risks.
common stock
Banks are currently using 8% market risk premium. Data as of Feb, 2013.
When one has market risk premium he/she is willing to take an financial risk. The risk premium is how much value stocks should return over a risk-free investment. Stocks are considered a higher financial risk (and possible a faster gain) opposed to, for instance, bonds.
Maturity Risk Premium (MPR)
High-yield (junk) bonds have the highest risk of default. These bonds are issued by companies with lower credit ratings and are more likely to default compared to investment-grade bonds.
The highest risk of cancer is for people that smoke. Perhaps the next highest risk is for people exposed to secondhand smoke. And then after that would be people that are exposed to toxic chemicals and pollutants in the air that they breathe.