Reply 1) A Default Risk Premium (DRP) is the supplementary yield or interest rate sought by investors to offset the risk of a borrower defaulting.
Assignment Question Reply 1) A Default Risk Premium (DRP) is the supplementary yield or interest rate sought by investors to offset the risk of a borrower defaulting. In simpler terms, it signifies the additional return investors expect to compensate for the possibility that the borrower might not fulfill its debt obligations. Notes: The default risk … Read more