= Risk premium
{title2=$\mathbb E W-\operatorname{CE}(W)$}
{wiki}
In <expected utility> theory, the risk premium is the difference between expected wealth and its certainty equivalent: $U(\operatorname{CE}(W))=\mathbb E U(W)$. For increasing concave <utility functions> it is nonnegative by the <Jensen inequality>. In financial asset pricing, risk premium also refers to expected return above a specified risk-free benchmark; the benchmark and whether the premium is monetary or proportional must therefore be stated.
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