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Calculating the risk-free premium

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Schalk Louw is a portfolio manager at PSG Wealth.
Schalk Louw is a portfolio manager at PSG Wealth.

I have discussed the concept of danger pay on a few previous occasions. Basically, this term was mostly associated with soldiers who were required to work in very dangerous areas.

These days it can even include special types of insurance benefits against events like kidnapping for families whose occupations require them to relocate to areas where the risk of abduction is high. Whatever the package entails, in essence it refers to extra benefits or compensation for people who are risking their lives to work in dangerous places, amongst other things.

Many individuals find these benefits extremely attractive, but it’s crucially important that whoever considers them is aware of the associated dangers. In most cases, workers must be willing to pay with their lives in exchange for a few extra thousand rand per month.

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Rand - Dollar
15.98
-0.3%
Rand - Pound
21.19
-0.3%
Rand - Euro
18.02
-0.3%
Rand - Aus dollar
11.34
-1.0%
Rand - Yen
0.14
-0.2%
Gold
1,781.58
+0.2%
Silver
22.42
+0.2%
Palladium
1,861.00
+0.3%
Platinum
956.50
+1.5%
Brent Crude
73.08
+4.6%
Top 40
66,070
+2.3%
All Share
72,477
+2.1%
Resource 10
69,562
+3.2%
Industrial 25
95,746
+2.5%
Financial 15
13,979
-0.8%
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