Risk-Free Rate in the Covid-19 Pandemic: Application Mistakes and Conclusions for Traders
General Finance
2021-11-16 v1
Abstract
This short paper is intended to demonstrate a crucial omission made by traders in setting the risk-free interest rate, especially in times of crisis: instead of increasing the risk-free rate, traders undercut it en masse on the contrary. This results in incorrect investment and financial decisions, especially those involving CAPM models, option pricing models and portfolio theory.
Cite
@article{arxiv.2111.07075,
title = {Risk-Free Rate in the Covid-19 Pandemic: Application Mistakes and Conclusions for Traders},
author = {Magomet Yandiev},
journal= {arXiv preprint arXiv:2111.07075},
year = {2021}
}
Comments
11 pages, 1 figure, 1 Graph, 1 Tabl