# Risk Premium

*Risk & Portfolio — Finicade finance glossary*

The extra return investors demand for holding something risky instead of a safe asset. Stocks offer a premium over government bonds precisely because they can lose money — no premium, no reason to bear the risk.

**Related terms:** [CAPM (Capital Asset Pricing Model)](https://finicade.com/glossary/capm), [Systematic Risk](https://finicade.com/glossary/systematic-risk), [Sharpe Ratio](https://finicade.com/glossary/sharpe-ratio)

**Taught in:** Macro & Markets — Banks, Risk & the Extended IS-LM

Source: https://finicade.com/glossary/risk-premium