Difference between revisions of "Risk free rate of return"

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(Source: http://www.bis.org/publ/bppdf/bispap72l.pdf)
m (Added internal reference to Capital asset pricing model.)
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== See also ==
 
== See also ==
 +
* [[Capital asset pricing model]]
 
* [[Credit spread ]]
 
* [[Credit spread ]]
 
* [[Gilts]]
 
* [[Gilts]]
 
* [[Interest rate risk]]
 
* [[Interest rate risk]]

Revision as of 12:03, 12 August 2013

The theoretical rate of return which can be earned on hypothetical investments which are considered to be risk-free for modelling purposes.


Historically, the rates of return on certain types of domestic central government debt were considered to be a close enough proxy for such hypothetical risk-free investments.

In the modern era, domestic central government debt is no longer considered to be risk-free for this purpose, nor for a number of other purposes for which it was historically considered to be risk-free.


See also