Default premium

A differential in promised yield that compensates the investor for the risk inherent in purchasing a corporate bond that entails some risk of default. Often the premium is measured as the yield over and above a government bond yield of similar coupon and maturity.

Default Premium

The return over and above the risk-free rate of return that an investor demands in exchange for accepting the risk inherent to an investment. The default premium becomes larger with greater amounts of risk. For example, an investment grade bond has a lower default premium than a junk bond, which carries more risk, but a higher premium than a Treasury security, which is riskless.

单词	default premium
释义	Default premium Default premium A differential in promised yield that compensates the investor for the risk inherent in purchasing a corporate bond that entails some risk of default. Often the premium is measured as the yield over and above a government bond yield of similar coupon and maturity. Default Premium The return over and above the risk-free rate of return that an investor demands in exchange for accepting the risk inherent to an investment. The default premium becomes larger with greater amounts of risk. For example, an investment grade bond has a lower default premium than a junk bond, which carries more risk, but a higher premium than a Treasury security, which is riskless.
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