1010 Measuring Market Risk Market Risk Premium-Risk premium of market portfolio. Difference between market return and return on risk-free Treasury bills 14 12 10 Market 8 Portfolio 6 62 0 0.2 0.4 0.6 0.8 Beta Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 10- 10 Irwin/McGraw-Hill Measuring Market Risk Market Risk Premium - Risk premium of market portfolio. Difference between market return and return on risk-free Treasury bills. 0 2 4 6 8 10 12 14 0 0.2 0.4 0.6 0.8 1 Beta Expected Return (%) . Market Portfolio