Old English freond friend, present participle of freogan to love, to favor, from Proto-Germanic *frijojanan to love (cf. Old Norse frÃ¦ndi, Old Frisian friund, Middle High German friunt, German Freund, Gothic frijonds friend, all alike from present participle forms).
Best Answer: Risk and more importantly return, are INVESTING terms, NOT insurance terms. Risk is the chance you take of losing your money. Return is the amount of money you GAIN. So they are opposites-the greater the risk, the greater the potential return. Think of it like going to the horse track.
This risk premium, which is over and above the risk free rate of return, is the required rate of return that an asset must generate in order for anyone to invest in it. If the asset does not produce the required rate of return, then the price is too high relative to the risk exposure.