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Risk-free rate for CAPM? (1 Viewer)

cityncolor88

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Hey commerce/business go-ers

Trying to build the CAPM - using data from 2004 - 2009 (5 yrs) and it's weekly data..

Wondering what rf rate I should be using.. 10 year gov't bond? or 5 years or 90 days?

Thanks
 

Monstar

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risk free rate is the 10 year treasury bond.. from memory. check it ouuttt.
 

akqjt

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Risk free rate is the shortest term government security as this has less risk than a longer term bond. If you're evaluating a project though or using CAPM to calculate the cost of equity for corporate finance, I would use 15yr bond yield.
 

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