How is the risk free rate of return calculated for market risk?

The market risk rate of return includes the risk-return rate and the risk-free rate of return, and these two parts of the risk-free rate of return are the money, and you don't need to take any risk to get this kind of reward. The ratio of this reward divided by the principal you have is called the risk-free rate of return, and the risk-free rate of return that is usually used today is the treasury bonds set by the central bank. <>

The treasury bonds for the same period stipulated by the bank are recognized as a risk-free rate of return because the central bank.

And the bank itself pushes this bank deposit.

and wealth management products.

It is guaranteed by the credibility of the whole ** and the credibility of the bank. One is the bank's deposit interest rate for the same period.

One is the interest rate of treasury bonds issued by the central bank for the same period, both of which can basically be recognized as risk-free returnsBecause after buying a treasury bond, the probability that the treasury bond cannot be repaid is almost zero, so the buyer almost does not bear the risk, and naturally it is considered a risk-free reward. <>

Because there are two kinds of guarantees for treasury bonds, one is to protect the tax of the current year, and the credibility of this guarantee is the strongest, because it is impossible to have no tax in the current year. If the economy is good or the economy is bad, there must be taxes, so it can basically be repaid, which does not need to be questioned, and the other is the special local bonds issued, such as the Three Gorges Dam.

It has also been found that this kind of treasury bond is guaranteed by the income obtained from the construction of the entire public project in the next few yearsAs long as you make money, this principal and interest will be able to be overpaid to you, and the possibility of such losses is also very low. <>

Investing in the market, such as buying, why can yours get a return of 15 points, while keeping your money in the bank can only get a return of 4 points? Because the other 11 points are the risk-reward ratio, that is, you buy ** and take the risk of loss, the higher the risk of loss, the more risk-reward you get. After all, the risk is directly proportional to the return, and it is possible to make more money and lose more money.

Regarding the risk-free rate of return of market risk, the correct way to calculate it is: market risk-return rate market ** portfolio rate of return risk-free rate.

The risk-free rate of return is equal to the pure interest rate plus the inflation surcharge, the risk and return are proportional, the more you earn, the more you may lose, please take the risk-free rate of return correctly.

The risk-free rate of return is the expected rate of return of the market portfolio minus the market rate of return on risk. This one is just fixed. However, this can only calculate the risk-return of market investment.

The rate of return is the rate of risk compensation that is additionally required by investors to bear the risk. The return on risk generally includes the rate of return on default, the rate of return on liquidity risk and the rate of return on maturity.

The risk-return ratio is the part of the additional return rate that the investor receives by taking the risk in excess of the time value, that is, the ratio of the amount of risk-return to the original investment. The rate of return on risk is an important component of the rate of return on investment, and if inflation is not taken into account, the rate of return on investment is the sum of the time value rate and the rate of return on risk.

The risk-reward is the additional reward that the investor asks for for taking the risk to invest, and exceeds the risk-free return. The basic relationship between risk and reward is that the greater the risk, the higher the rate of return required.

The risk-reward for default is the excess return that investors claim for taking on the risk of default. The so-called default risk refers to the risk to investors caused by the borrower's failure to pay interest or repay the principal on time.

The relationship between the two is directly proportional.

The risk-return ratio mainly depends on two factors: the size of the risk and the risk**. In a risk market, the level of risk** depends on the degree of risk appetite of investors.

The risk-return ratio includes the default risk, the liquidity risk, and the maturity risk. The risk-return ratio is calculated as follows:

1. rr= v.

1. RR is the rate of return on risk;

2. It is the value-at-risk coefficient;

3. V is the standard deviation rate.

2. rr= *km-rf).

1. RR is the rate of return on risk;

2. It is the value-at-risk coefficient;

3. KM is the average rate of return of the market portfolio;

4. RF is the risk-free rate of return (KM-RF) is the average risk-return ratio of the market portfolio.

The risk-free rate of return is equal to the net interest rate + inflation compensation rate, and the risk rate of return is the investor's risk compensation in addition to the pure interest rate and inflation compensation rate, interest rate = net interest rate + inflation compensation rate + risk-return rate.

in the capital asset pricing model.

Under the theoretical framework, assuming that the market is equilibrium, the capital asset pricing model can also be described as: expected rate of return = necessary rate of return.

Necessary rate of return = risk-free rate of return + risk rate of return, in the asset pricing model, the market rate of return is the weighted rate of return of the market portfolio, in general economic activity.

Medium refers to the average market return of a certain industry. In ** investment, returns and risks go hand in hand, returns come at the expense of risks, and risks are compensated by returns. The purpose of investors is to get profits, but at the same time, they inevitably face risks, and the theory and practical skills of investment revolve around how to deal with the relationship between the two.

The basic relationship between benefits and risks is that returns correspond to risks. In other words, the riskier ** requires a relatively high rate of return; On the contrary, the risk of investment objects with lower returns is relatively small.

However, just because there is such a basic relationship between risk and return, we must not blindly assume that the greater the risk, the higher the return. The principle of the correspondence between risk and return only reveals this intrinsic relationship between risk and return: the symbiosis of risk and return.

Coexistence, risk-taking is the premise of obtaining benefits; Benefits are the costs and rewards of risk. The expected rate of return is the compensation that investors deserve for taking various risks. The risk-free rate of return refers to the rate of return that can be obtained by investing funds in an investment object without any risk, which is an ideal investment return.

Take this rate of return as a basic income, and then consider various possible risks, so that investors can get due compensation. In real life, there can be no ideal ** without any risk, but it can be replaced by some kind of ** with little change in returns.

The difference between the risk-return rate and the necessary rate of return is: the necessary rate of return: refers to the reward that accurately reflects the risk of expected future cash flows.

It can also be referred to as the minimum rate of return that people must earn to be willing to invest (buy an asset). An important way to estimate this rate of return is to base it on the concept of opportunity cost: the necessary rate of return is the rate of return of other options of equal risk, as well as the rate of return of equal risk finance**.

Expected rate of return: refers to the average rate of return of various possible rates of return weighted by probability, also known as expected value or mean value. Indicates the average rate of return expected under certain risk conditions.

Types of risk-reward include:

1. Default risk reward refers to the excess return required by investors due to the risk of default;

2. The so-called default risk refers to the risk brought to investors by the borrower's inability to pay interest or repay the principal on time;

3. Liquidity risk reward refers to the excess return required by investors due to taking liquidity risks;

4. Liquidity refers to the characteristics of an asset that can be converted into cash in a timely manner, also known as liquidity, with strong liquidity, that is, good liquidity and low risk. Liquidity risk is the risk brought to investors due to the different liquidity of investments;

5. Term risk reward refers to the excess return required by investors due to taking on term risk.

Maturity risk is the risk assumed due to the different maturity dates of the investment, and the longer the maturity date of the investment, the more uncertainties and risks are assumed, and therefore additional compensation is required.

The necessary rate of return is not the same level as the coupon rate, the real rate of return, and the expected rate of return (yield to maturity). When issuing bonds, the coupon rate is determined based on the necessary rate of return for the other risky investment; The necessary rate of return is the rate of return required by investors for such risk investments, which accurately reflects the return on future cash flow risks, also known as the minimum rate of return that people are willing to make in the investment.

The free-risk return rate refers to the rate of return obtained by social investors by investing in financial products with high credit ratings and stable returns. This category of financial products includes various types of bank deposits, treasury bonds, financial bonds and other financial products with similar credit ratings. The risk-free rate of return is the return on investment that almost all investments deserve.

The risk-free rate of return refers to the rate of return that can be guaranteed by investing in an investment project. In Western countries, the rate of return offered by fixed-interest bonds is generally used as the risk-free rate of return.

Extended information: 1. The risk-free interest rate refers to the interest rate that can be obtained by investing funds in an investment object without any risk.

This is an ideal return on investment.

Generally subject to the benchmark interest rate.

Effect. Interest rates are the opportunity cost.

and the compensation of risk, in which the compensation for the opportunity cost is called the risk rate of the silver-free bucket model. Professionally, it is an investment in assets without credit risk and market risk, which refers to the interest rate of treasury bonds with a maturity date equal to the investment period.

2. The risk-free interest rate is one of the influencing factors of the option, and the level of the risk-free interest rate will also affect the time value and the value of the option. When interest rates rise, the time value curve of options shifts to the right; Conversely, when interest rates fall, the time value curve of options shifts to the left. However, the overall impact of interest rate levels on the time value of options is still very limited.

The key is the impact on the intrinsic value of the option, on the call option.

is a positive effect on put options.

It's the reverse effect.

3. The factors affecting the warrant** include not only the underlying stock**, but also the exercise of the warrant**, the volatility of the underlying stock**, the remaining maturity, and the risk-free interest rate. Among them, the first four factors have a more definite impact on the warrant**, such as the underlying stock** and the call warrant** move in the same direction, and move in the opposite direction as the put warrant**; The remaining maturity is in a positive direction with the warrant (whether call or put)**, etc. The impact of the risk-free rate on warrants** is more complex, and in the actual situation, different perspectives will lead to different conclusions.