# Market Risk Premium

Market Risk Premium is the difference between the expected return on a market portfolio and the risk-free rate. Market Risk Premium is also called equity premium, market premium and risk premium.

# Market Risk Premium

**Market Risk Premium** is the difference between the expected return on a market portfolio and the risk-free rate. Market Risk Premium is also called equity premium, market premium and risk premium.

## Interpretation of Market Risk Premium

The Market Risk Premium can be historical differential return of the market over treasury bonds; the expected market risk premium (expected differential return) of the market over treasury bonds; or the required market risk premuim of a portfolio over the risk-free rate required by an investor.