What is risk premium?
Compensation demanded above the risk-free rate for bearing risk. It bundles pay for tenant credit, lease rollover, market, liquidity, interest-rate, operating, and execution exposures.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.