Economics B A-Level
Risk premium
What Risk premium means in Economics B A-Level, as defined for Pearson Edexcel.
Definition of Risk premium
Check what you remember
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Reference: Pearson Edexcel
The higher interest rate charged to reflect the increased probability of default when assessed credit risk is higher.
Topics that use Risk premium
- The role of the financial sector (Pearson Edexcel A-Level)
Related terms
- Capital allocation
- Credit rating agencies
- Financial intermediation
- International trade
- Liquidity
- Medium of exchange
- Payment systems
- Saving and borrowing
Using Risk premium in the exam
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