Market Risk Risk-free Rate Systematic Risk 
Andrew Stolz
AUGUST 5, 2020
It helps an investor understand what to expect to earn in relation to the risk-free rate and the market return. CAPM assumes that the minimum a rational investor would earn is the risk-free rate by buying the risk-free asset. What Impacts the Capital Asset Pricing Model? E(r) = Rf + ??(Rm
Valutico
FEBRUARY 13, 2025
Market Risk-Free Rate: Beta calculations often involve comparing the asset’s returns to a risk-free rate, such as the yield on a government bond with a similar maturity. For short-term trading strategies, other risk measures and technical indicators may provide more relevant insights.
Equidam
APRIL 22, 2025
10] , [23] , [2] Discount Rate: The rate used to discount future cash flows is typically the cost of equity, calculated via the Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. [23] 23] Risk-Free Rate: Tied to government bond yields (e.g.,
Expert insights. Personalized for you.
52 
Let's personalize your content