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Bond Premium

   Also found in: Wikipedia 0.01 sec.
Bond premium

Risk Premium
The return over and above the risk free rate of return that an investor expects in exchange for each additional unit of risk. According to Markowitz portfolio theory, rational investors only accept additional risk if they expect a greater return. One refers to this greater return as the risk premium. See also: Risk capital, Eat well, Sleep well.


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T will report interest income and bond premium, and P will report interest expense and bond issuance premium.
Swanson, Federal Reserve Bank of San Francisco, "The Bond Premium in a DSGE Model with Long-Run Real and Nominal Risks" * Eric M.
 
 
 
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