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    Britt9985's Avatar
    Britt9985 Posts: 1, Reputation: 1
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    #1

    Nov 7, 2007, 05:43 PM
    How do I find the default risk premium given corporate and municipal bonds?
    How do I find the default risk premium given corporate and municipal bonds? Meaning what is the equation I should use?
    CliffARobinson's Avatar
    CliffARobinson Posts: 1,416, Reputation: 101
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    #2

    Mar 14, 2012, 01:53 PM
    The formula for risk premium, sometimes referred to as default risk premium, is the return on an investment minus the return that would be earned on a risk free investment. The risk premium is the amount that an investor would like to earn for the risk involved with a particular investment. - Source
    I found a great PDF of Finance Homework, which includes detailed formulas and instructions to calculate Default Risk Premiums.
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