Market Risk Risk-free Rate Specific Risk 
Valutico
FEBRUARY 27, 2024
The discount rate effectively encapsulates the risk associated with an investment; riskier investments attract a higher discount rate. Different types of discount rates such as risk-free rate, cost of equity, or cost of debt, are used contextually in financial analysis.
Andrew Stolz
AUGUST 5, 2020
It helps an investor understand what to expect to earn in relation to the risk-free rate and the market return. CAPM assumes that the minimum a rational investor would earn is the risk-free rate by buying the risk-free asset. How Do You Calculate the Capital Asset Pricing Model?
Musings on Markets
FEBRUARY 10, 2021
If you put all your money in one or the other of these companies, you are exposed to all these risks, but if you spread your bets across a dozen or more companies, you will find that company-specific risk gets averaged out. Cost of equity in US $ for German project = 1% + 1.1
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