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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (15228)2/20/2002 1:38:40 AM
From: Moominoid  Read Replies (2) | Respond to of 74559
 
According to the usual versions of the CAPM model the risk free rate is the 90 day treasury bill rate. You add beta*equity premium to that to get the discount rate for stocks. Of course there are other theories and who knows what the market is doing but there is some rationale to this. Especially for retail investors who often have less or no access to the bond market (depending on country - e.g Australia).


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