Market risk premium

In CAPM, the market risk premium is Rm − Rf and represents the additional expected reward for bearing the market's systematic risk. Multiply this premium by the investment's beta, then add the risk-free rate. A supplied premium is already the difference and should not have the risk-free rate deducted again. Historical average excess returns, forecasts and survey estimates can differ; the input must suit the valuation purpose and market. A realised market return for a particular year may be negative and is not necessarily the expected long-run premium.