Question
Hi, how do I estimate the risk free rate given the following data? - - Data: This project makes use of annual data for two
Hi, how do I estimate the risk free rate given the following data?
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Data: This project makes use of annual data for two risky securities: the S&P 500 Index and Gold. Annual values for each of these securities during the 29-year period from 1975-2003 are provided in a spreadsheet named GroupProject1Data.xls.
The spreadsheet is available on the class web page. You will also need an estimate of the annual risk-free rate. To get this rate, you should take the most recent annual rate on U.S. Government Securities (note: select the Treasury Security you feel is most relevant for a one-year investment horizon). These rates can be found on the following web page: http://www.federalreserve.gov/releases/H15/update/
- List your estimate of the annual Risk-Free rate.
- What date did you use to identify this interest rate?
- What US Treasury category did you use to identify this rate?
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Data from spreadsheet:
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