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How should we estimate the risk free rate for the purpose of applying CAPM in order to find the discount rate for property valuation? For
How should we estimate the risk free rate for the purpose of applying CAPM in order to find the discount rate for property valuation? For a particular property type in a given market, if applying the CAPM formula gives you opportunity cost of capital (OCC) as 9% while the cap rate based approach suggests that OCC for the same property type in the same market should be 11%, what would be your investment advice for such property?
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