A "Risk Premium" is the extra return that investors expect to receive for taking on additional risk compared to a safer investment. For example, investing in stocks typically carries more risk than investing in government bonds. Therefore, investors demand a higher return from stocks to compensate for the potential loss they might face. This concept is crucial in finance, as it helps investors make decisions about where to allocate their money. The Risk Premium varies depending on factors like market conditions, economic outlook, and the specific characteristics of the investment, influencing how much risk an investor is willing to accept.