In general the more risk you take on the more return you will get. You get a risk premium for taking on more risk. Part of that risk premium is there to cover defaults. Trough diversification you can better control the risk and make sure that you do not lose all the invested capital should a loanee default.

Was this article helpful?


0 out of 0 found this helpful
Have more questions? Submit a request

Comments

0 comments

Article is closed for comments.

Frequently asked question

Haven’t found the answer?

Our team is only one e-mail away and will be happy to help

Delia Aellen
Delia Aellen
Massimo Fusco
Massimo Fusco
Roland Burkard
Roland Burkard
Alex Koch
Titus Spirig
Michael Boge
Michael Boge