Can A Risky Asset Have A Beta Of Zero? Yes. It is possible, in theory, to construct a zero beta portfolio of risky assets whose return would be equal to the risk-free rate. It is also possible to have a negative beta; the return would be less than the risk-free rate. Do risk-free assets have
What Is The Best Proxy For The Risk Free Rate? The return on domestically held short-dated government bonds is normally perceived as a good proxy for the risk-free rate. In business valuation the long-term yield on the US Treasury coupon bonds is generally accepted as the risk-free rate of return. What should I use as
Who Developed CAPM? The CAPM was developed in the early 1960s by William Sharpe (1964), Jack Treynor (1962), John Lintner (1965a, b) and Jan Mossin (1966). The CAPM is based on the idea that not all risks should affect asset prices. Why is CAPM wrong? Research shows that the CAPM calculation is a misleading determination