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arXiv · 2111.07075

Risk-Free Rate in the Covid-19 Pandemic: Application Mistakes and Conclusions for Traders

Magomet Yandiev
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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.

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Magomet Yandiev. 2021-11-13. Risk-Free Rate in the Covid-19 Pandemic: Application Mistakes and Conclusions for Traders. https://arxiv.org/abs/2111.07075

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