Hello, could you explain to me the risk-free return? Every example that I have ever seen lists the risk free return as the risk free return instead of the T-Bill rate? I just like to know 100 percent that I am correct. Can you correct me if I'm wrong? Let's say the T-Bill rate is 2 percent. The Expected Market Return is 8 percent. Beta is 2.2 . Am I still able to calculate expected return as the T-Bill yield is 2 percent? And the reason why the risk-free rate is a part of the CAPM equation is because it's the compensation that an investor gets for putting money into a company for a period of time and taking on the risk, instead of just putting that money into long term government bonds or T-Bills? Also, why is the risk free rate subtracted from the market premium? As I understand the other side of the equation (Beta*Market Risk Premium) represents additional risk. I understand that without the risk free rate that would mean a higher expected return. Fundamentally, why do we subtract the risk free return to get the market risk premium?
Your teaching visuals are very organized and your explanations are very clear, thank you.
Exactly
maaan, i was struggling to understand this topic. u explained it just like that. thank you.
u got my like : )
Thank you for reminding me about BODMAS
Brief and precise ❤ thanks you!
Thank you so much this helps a ton I can’t understand my professor
This video was super helpful, i found exactly what I needed thank you so much :))
Thank you so much for clarifying CAPM.
thanks for your detailed information and explaination
Tq so much sir for clearing the CAPM
And eassy understanding sir tq
Made my life easier ❤
Cost of equity = expected return...never heard of it 😮
Very nice presentation!!
Very helpful indeed
thanks for an excellant video
Thank you..👏🏾
Thanks 🙏
Helpful thank you....
Nice
Hey thanks for this detailed video, it was very helpful. Am I the only one who found RF = 0.5 because (-02/-0.4) = 0.5 . how did you find RF= 2?
-0.4/-0.2 = 2
Yes, he must have mistakenly calculated it the other way round
Thanks alot
Hello, could you explain to me the risk-free return? Every example that I have ever seen lists the risk free return as the risk free return instead of the T-Bill rate? I just like to know 100 percent that I am correct. Can you correct me if I'm wrong?
Let's say the T-Bill rate is 2 percent. The Expected Market Return is 8 percent. Beta is 2.2 . Am I still able to calculate expected return as the T-Bill yield is 2 percent?
And the reason why the risk-free rate is a part of the CAPM equation is because it's the compensation that an investor gets for putting money into a company for a period of time and taking on the risk, instead of just putting that money into long term government bonds or T-Bills?
Also, why is the risk free rate subtracted from the market premium? As I understand the other side of the equation (Beta*Market Risk Premium) represents additional risk. I understand that without the risk free rate that would mean a higher expected return. Fundamentally, why do we subtract the risk free return to get the market risk premium?
Hello there, Check out the lesson on the Risk-Free Rate here: ruclips.net/video/qgrEKoyKNUg/видео.html
Hello can't see the link
Good day, which link are you referring to?
how you get the 0.2
1.2RF-RF=1.2RF-1RF=0.2RF
Rf-1.2Rf= -0.2? Is the math correct there?
Yes it's like you take one a whole number then you subtract 1.2 from it... (1-1.2)
You will get -0.2