Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called

Answer: Option A

Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called current risk premium. A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield; an asset's risk premium is a form of compensation for investors who tolerate the extra risk, compared to that of a risk-free asset, in a given investment.