Why is a high risk premium an advantage for the investor, Financial Management

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Why is a high risk premium an advantage for the investor

1. Change in Interest Rates. Briefly discuss conditions that can cause a shift in the demand for funds and a change in the interest rate.

2. Impact of Economy on Risk Premium. Explain why a weak economy may cause the risk premium to rise.

3. Risk Premiums Required by Investors. Why is a high risk premium an advantage for the investor? Why is a low risk premium an advantage for an investor?

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