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John Moffat.
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fazeel93
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Hello Sir John,
One of the assumptions in CAPM is that there is an no restrictions in risk free rate lending from, what does that mean
John Moffat
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As you have typed it, it does not mean anything at all!!
The actual relevant assumption is that in practice there is no such thing as a completely risk free rate. We assume for exams that short-term government securities are risk-free. However, although they are generally of very low risk in the short-term, they are not completely without risk.
I do suggest that you watch our free lectures – they are a complete course for Paper F9 and cover everything needed to be able to pass the exam well.
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