How To Calculate

Learn how to calculate anything
Menu
  • bmi
Home
rate
How to Calculate Risk Free Rate.
rate

How to Calculate Risk Free Rate.

Rosemary Njeri

The risk-free rate represents the interest an investor would expect from a zero risk investment over a specified period of time.

Since it carries no risk, all other investments, which carry some amount of risk, must offer a higher return to attract investors.

The risk free rate should be inflation adjusted.

Formula to calculate risk free rate.

 Calculate Risk Free Rate.

Example:

Suppose a 10 year government bond rate is 3.5 and the inflation rate is 1%. Calculate the risk free rate.

 Calculate Risk Free Rate.

Therefore, the risk free rate is 0.025%.

Share
Tweet
Reddit
Pinterest
Email
Prev Article
Next Article

Related Articles

How to Calculate Loan to Value Ratio.
The loan-to-value ratio is a financial term used by lenders …

How to Calculate Loan to Value Ratio.

How to Calculate APR.
APR is short for annual percentage rate. APR is the …

How to Calculate APR.

Popular Posts

    Categories

    learntocalculate.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

    How To Calculate

    Learn how to calculate anything

    Pages

    • About Us
    • Contact Us
    • Privacy Policy
    Copyright © 2025 How To Calculate

    Ad Blocker Detected

    Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

    Refresh