Start learning →

The risk-free rate in CAPM is usually the yield on

Abank deposits
Ban equity index
Ccorporate bonds
Dgovernment bonds
Answer & Solution
Correct answer: D. government bonds
Government bonds carry the least default risk in a market, so their long-term yield serves as the risk-free rate.
Practise this question with Quill — CA Inter →

Keep practising Cost of Capital Basics

Browse all Cost of Capital Basics questions for CA Inter, or explore more Financial Management topics.

Start a Cost of Capital Basics lesson →
Related questions