1.NounThe return on investment in excess of the (theoretical) risk-free rate of return that an investment is expected to yield: the extra benefit that an investor either gets or hopes to get in exchange for taking a risk. (Often measured by proxy measures such as aggregate corporate earnings compared with interest rates on certain benchmark bonds that stand in for risk-free securities.)
"The risk premium of equities can turn negative according to proxy measures, as has often occurred over the decades.; The loan shark added another 10% as the risk premium for an especially dubious borrower."
2.NounAn increase in the interest rate of a bond or loan according to the financial risk.
"The loan shark added another 10% as the risk premium for an especially dubious borrower."