I know this is elementary but for whatever reason some of the basic stuff I've lost in learning the complicated things. Credit risk, is composed of 3 other types of risks, maturity, default and liquidIty. Credit risk plus real rate and inflation is the expected rate of return. Is that right?

Acccording to the CFA Curriculum: Required rate of return on a security = real risk-free rate + inflation premium + default risk premium + liquidity risk premium + maturity risk premium. The CFA Curriculum didn't categorize "default + liquidity + maturity" as credit risk, so I couldn't comment if that's right.

A CFA Level 1 Discussion About Credit Risk Versus Default Risk/premiums

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This topic has 1 reply, 2 voices, and was last updated Apr-188:53 am by tkt.

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- googs1484
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  - CFA Level 3
  21 Apr 2018 at 5:20 pm
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  I know this is elementary but for whatever reason some of the basic stuff I’ve lost in learning the complicated things. Credit risk, is composed of 3 other types of risks, maturity, default and liquidIty. Credit risk plus real rate and inflation is the expected rate of return. Is that right?
- tkt
  Participant
  - CFA Level 3
  22 Apr 2018 at 8:53 am
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  Acccording to the CFA Curriculum:
  
  Required rate of return on a security = real risk-free rate + inflation premium + default risk premium + liquidity risk premium + maturity risk premium.
  
  The CFA Curriculum didn’t categorize “default + liquidity + maturity” as credit risk, so I couldn’t comment if that’s right.
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