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June 8, 2024
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June 10, 2024

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The yield differential (premium) between short-term and long-term investments/ instruments that arises only for time horizon considerations. It relates to matching the time horizons of investors and issuers, making the yield differential between short-term and long-term instruments a matching premium rather than necessarily a premium for risk taking.

If such a premium arises from risk taking, rather than simply for time differences, it will be known as a horizon risk premium (HRP).

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