- CFA Exams
- CFA Level I Exam
- Study Session 9. Equity Valuation (1)
- Reading 25. Return Concepts
- Subject 2. The equity risk premium
CFA Practice Question
The authors suggest that for the purpose of valuation,
B. shot-term government debt rate should be used as the risk-free rate.
C. the analyst should try to match the duration of the risk-free-rate measure to the duration of the asset being valued.
A. long-term government bond YTM should be used as the risk-free rate.
B. shot-term government debt rate should be used as the risk-free rate.
C. the analyst should try to match the duration of the risk-free-rate measure to the duration of the asset being valued.
Correct Answer: C
User Contributed Comments 2
| User | Comment |
|---|---|
| kingirm | risk free rate has a duration ?? risk free rate is the risk free rate, i think.. any thoughts? |
| nadine2018 | use t-bill for short term and t-bonds for long term |