Why high return asset in recession period have low risk premium and low return assets have high risk premium?

[Sabareeswari]

Why high return asset in recession period have low risk premium and low return assets have high risk premium?

 

[pineapple]

If i understand your question correctly, then it’s fairly simple. E(R)-Rf = risk premium, when you are in a recession expected returns are typically higher owing to a lower valuation.