eFinanceManagement

Liquidity Preference Theory: Meaning, Curve, Limitations and More

Liquidity Preference Theory: MeaningLiquidity Preference Theory is a theory that suggests that investors demand higher interest rates or additional premiums for medium or long-term… Read Article

Maturity Risk Premium – Meaning, Need, Formula and Interpretation

Maturity Risk PremiumMaturity Risk Premium is basically the extra return that an investor demands or gets for bearing the maturity risk. Usually, the concept… Read Article

Liquidity Premium

The liquidity premium is the compensation that an investor receives for investing in securities having low liquidity. Liquidity refers to the ease with which… Read Article

Equity Risk Premium

What is Equity Risk Premium?Investing in equity is not risk-free. The risk is not only associated with returns, but the capital is also not… Read Article

Default Risk Premium – Meaning, Purpose And Calculation

Default risk premium or (DRP) represents the extra return that the borrower must pay the lender for assuming the extra or default risk. It… Read Article

Market Risk Premium

Meaning of Market Risk PremiumThe additional return an investor receives for holding a risky market portfolio instead of risk-free assets is termed as a… Read Article

Cost of Equity – Capital Asset Pricing Model (CAPM)

The cost of equity is estimated using Sharpe’s Model of Capital Asset Pricing Model. The model finds the cost of capital by establishing a… Read Article