Respuesta :
The risk-free rate for the CAPM will be 8%. when the expected return on the market is 16%.
What is a risk-free rate?
- The risk-free interest rate is the rate of return an investment provides without risk.
- Risk-free interest is kind of a theoretical concept because all investments, no matter how small, carry some degree of risk.
- In practice, it is considered the interest paid on short-term government debt.
- All investments involve at least a small amount of risk, so risk-free returns don't really exist.
- To calculate the real risk-free interest rate, subtract the inflation rate from the yield on the government bond corresponding to the investment period.
- Risk-free return refers to the theoretical return on investment without risk.
- In reality, all investments involve at least a small amount of risk, so risk-free returns don't really exist.
- To calculate the real risk-free interest rate, subtract the inflation rate from the yield on the government bond corresponding to the investment period.
to know more about risk-free rates refer to:
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