Risk-free rate for CAPM? (1 Viewer)

[cityncolor88]

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]

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

 

[akqjt]

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.