Risk-Free Rate

Into the Abyss: What If Nothing is Risk Free? ArXiv ID: ssrn-1648164 “View on arXiv” Authors: Unknown Abstract In corporate finance and investment analysis, we assume that there is an investment with a guaranteed return that offers both firms and investors a “risk free” Keywords: corporate finance, risk-free rate, investment analysis, cost of capital, capital budgeting, Corporate Equity Complexity vs Empirical Score Math Complexity: 4.0/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper focuses on conceptual discussions and theoretical implications of the risk-free rate, with moderate mathematical notation but no complex derivations or empirical data; it lacks backtesting or implementation details. flowchart TD Q["Research Question: Is a truly Risk-Free Rate Possible?"] --> M["Methodology: Review & Analysis"] M --> D["Data: Historical Defaults & Macro Shocks"] D --> C["Computation: Modeling & Scenario Analysis"] C --> F["Key Findings: No True Risk-Free Asset Exists"] F --> O["Outcome: Adjusted Cost of Capital Models"]

What is the Riskfree Rate? A Search for the Basic Building Block ArXiv ID: ssrn-1317436 “View on arXiv” Authors: Unknown Abstract In corporate finance and valuation, we start off with the presumption that the riskfree rate is given and easy to obtain and focus the bulk of our attention on Keywords: Risk-Free Rate, Valuation, Cost of Capital, Capital Budgeting, Corporate Equity Complexity vs Empirical Score Math Complexity: 4.5/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is a conceptual, philosophical discussion on defining and obtaining the risk-free rate, with minimal advanced mathematics or empirical/data-driven backtesting implementation. flowchart TD A["Research Goal: What is the Risk-Free Rate?"] --> B["Methodology: Search & Conceptual Analysis"] B --> C{"Data Inputs: Govt Bonds,"} C --> D["Computational Process: Decompose Yields into<br>Pure Risk-Free Component &<br>Pricing of Default, Liquidity, Tax"] D --> E["Key Findings: No Perfect Proxy;<br>RFR is an Unobservable<br>Theoretical Construct"]