anonymous
  • anonymous
Hi, how is riskfree rate arrived at?
Finance
  • Stacey Warren - Expert brainly.com
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SOLVED
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schrodinger
  • schrodinger
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anonymous
  • anonymous
In short: it's a risk-free alternative investment (for example a government default free bond), and thus also an oppertunity cost.
anonymous
  • anonymous
An other way of lloking at it is as a combination of the expected real rate of the economy and the expected inflation. It is attached to the currency meaning the USD risk-free rate is distinct from euro risk-free rate and definitely different from INDIAN currency risk-free rate.

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