Average market risk premium in Sweden 2011-2023

Average market risk premiums (MRP’s) in Sweden have fluctuated between 2011 and 2023. As of 2023, the average market risk premium in Sweden amounted to 5.7 percent. Compared to other countries in Europe, Sweden’s average MRP were relatively high. Similar countries included Hungary and Greece amongst others.

Required, historical and expected

Separating the three types of market risk premiums is straightforward. Required MRP’s differ between investors, as approaches to investment change and measure the rate of return needed for an investment to be made. Expected premiums look at the rate of return, and what they are calculated to come out as, while historical MRP’s look back over a period at the average rate of return that investors previously got in the past.

Risk free rates

Risk free rates are closely associated to market risk premiums and measure the rate of return on an investment with no risk. As there is no risk associated, the rate of return is lower than that of an MRP. Average risk free rates across Europe (with some exceptions) were relatively low in 2022. As of 2022, The average risk-free rate of investment in Sweden was roughly 1.4 percent.