A risk premium is the return in excess of the risk-free rate of return that an investment is expected to yield. It’s an incentive for investors to take on the additional risk associated with an investment, compared to that of a risk-free asset. In the context of this question, the asset is negatively correlated with the economy. This means that when the economy is doing well, the asset tends to perform poorly, and vice versa. Therefore, investors would expect a return that’s below the risk-free rate of return, indicating a negative risk premium. This is because the asset provides a form of insurance against economic downturns. When the economy is doing poorly, the asset is expected to perform well, offsetting losses elsewhere in the portfolio. Therefore, the expected return on the asset is lower than the risk-free rate, resulting in a negative risk premium.