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Basic Question 5 of 8
The reading suggests that for the purpose of valuation,
B. shot-term government debt rate should be used as the risk-free rate.
C. the analyst should try to match the duration of the risk-free-rate measure to the duration of the asset being valued.
A. long-term government bond YTM should be used as the risk-free rate.
B. shot-term government debt rate should be used as the risk-free rate.
C. the analyst should try to match the duration of the risk-free-rate measure to the duration of the asset being valued.
User Contributed Comments 2
| User | Comment |
|---|---|
| kingirm | risk free rate has a duration ?? risk free rate is the risk free rate, i think.. any thoughts? |
| nadine2018 | use t-bill for short term and t-bonds for long term |
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Learning Outcome Statements
explain historical and forward-looking approaches to estimating an equity risk premium;
CFA® 2025 Level II Curriculum, Volume 3, Module 18.