标题: Question about Risk free rate [打印本页] 作者: nixie24 时间: 2011-7-13 16:38 标题: Question about Risk free rate
Which rate should I use for risk free rate, the rate of return for 10year T-bond or 3month T-bill?
The solution to last years mock exam Q73 says it should use 10year T-band rate. Is that solution wrong?作者: Benjiko 时间: 2011-7-13 16:38
match the risk free rate with the duration implied in the question.... money market typically deals with T-Bills where as capital budgeting (longer term) deals with T-Bonds作者: Flok 时间: 2011-7-13 16:38
yes, it's depend on your maturity. You match the maturity of your non-treasury issue with the maturity of any on-th-run treasury issue
