Determination of Risk-Free Interest Rates in Financial Assets

Shi Ke

Abstract: The most basic of pricing of financial products is to choose a reasonable benchmark discount rate, that is, an appropriate risk-free interest rate. Due to the diversification and fragmentation of the financial market, this paper uses the capital asset pricing model as the basis to study how to determine risk-free interest rates for three different industries: manufacturing, finance, and technology. There are some differences.

Keywords: Financial assets, Different industries, Risk-free interest rates, CAPM