Perpetuity factor and RFR: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>P.F.cowdell@shu.ac.uk
m (Categorise the page)
 
imported>Doug Williamson
(Recognise that RFRs are not entirely risk-free.)
 
Line 1: Line 1:
The fraction 1/r used when evaluating a fixed perpetuity.
Risk-Free Rate.
Using this simple formula assumes a constant periodic cost of capital (r) for all periods from now to infinity.


Sometimes known as the Perpetuity formula.
The abbreviation 'RFR' usually refers to risk-free benchmark interest rates, such as SONIA.


Also known as ''near'' risk-free rates, recognising that such rates are never entirely risk-free.


== See also ==
* [[Annuity factor]]
* [[Perpetuity]]


[[Category:Long_term_funding]]
Theoretically risk free rates of ''investment'' return, for example in the Capital asset pricing model, are more often designated by 'Rf' or 'rf'.
[[Category:Corporate_finance]]
 
 
==See also==
*[[Capital asset pricing model]]
*[[RFR WG]]
*[[Risk-free rate of return]]
*[[Risk-free rates]]
*[[SONIA]]
 
[[Category:Corporate_financial_management]]
[[Category:Financial_products_and_markets]]

Revision as of 18:33, 1 December 2018

Risk-Free Rate.

The abbreviation 'RFR' usually refers to risk-free benchmark interest rates, such as SONIA.

Also known as near risk-free rates, recognising that such rates are never entirely risk-free.


Theoretically risk free rates of investment return, for example in the Capital asset pricing model, are more often designated by 'Rf' or 'rf'.


See also