zlacker

If someone is promising a high yield above the market rates, just ask where this yield comes from

>>m00dy+(OP)
This is the Economy 101 lesson that many don't know (or pretend they don't)

The only ones that can "promise" a yield are sellers of titles for a fixed period. Anything else is an estimate at best

>>m00dy+(OP)
Usually it's the risk premium. Which makes sense for these ponzi schemes.

Exorbitant returns - extremely high probability of ending up at the bottom of the pyramid.

>>antist+I1
risk premium arises from supply and demand in markets typically with some kind of quoting system. free money out of nowhere isnt really "risk premium" in that sense.

>>m00dy+(OP)
From the line that goes up

>>MrMan+0n
I am not familiar with the specifics of their business model, but the definition of risk premium allows for multiple types of risk.

A company being unable to meet its original obligations due to a bad business model is a type of financial risk that falls under this definition.

> risk premium arises from supply and demand in markets typically with some kind of quoting system.

Risk premium arises any time there exists an investment that's riskier than the safest possible investment (whatever it may be). No other conditions are necessary.