The correct answer is A. risk premium.
A risk premium is the additional return that investors demand for taking on additional risk. It is the difference between the expected return on a risky asset and the risk-free rate of return. The risk premium is determined by the market’s perception of the risk of the asset, and it can vary depending on the specific asset and the investor’s risk tolerance.
Option B, investor premium, is incorrect because it does not accurately reflect the concept of risk premium. An investor premium is a fee that an investor pays to an investment advisor for managing their portfolio. It is not related to the risk of the assets in the portfolio.
Option C, additional premium, is incorrect because it is too vague. A premium can refer to a number of different things, such as a price difference between two assets or a fee that is paid for insurance. In the context of risk premium, it is the additional return that investors demand for taking on additional risk.
Option D, assumed premium, is incorrect because it is not the correct term for the concept. The term “assumed premium” is used in the insurance industry to refer to the amount of money that an insurance company charges for a policy. It is not related to the concept of risk premium.