The capital asset pricing model capm uses the concept of a

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The Capital Asset Pricing Model (CAPM) uses the concept of a risk free rate of return in order to calculate the cost of equity for a publicly traded organization. In practice, the long-term US Treasury bill rate is used as a proxy for this value. What does "risk free" really mean in CAPM? Is anything risk free? Is there a better alternative to the practice of using the Treasury bill rate?

Reference no: EM13618547

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