Generally, for CAPM calculations, the value to use for the risk-free interest rate is the
A)short-term U.S. Treasury bill rate.
B)long-term corporate bond rate.
C)medium-term corporate bond rate.
D)medium-term average rate on common stocks.

Question

Quizplus · Accepted Answer

The risk-free interest rate used in CAPM calculations should reflect a rate that is virtually free of credit risk and therefore the short-term U.S. Treasury bill rate is generally the best choice.

Generally, for CAPM Calculations, the Value to Use for the Risk-Free