One of the starkest contrasts in Investments is found in comparing the elegance of risk-free rate, market risk premium, and beta. Risk-free rates, market premia, and betas are very important in Investments. Possibilities abound, and any sampling of academicians and practitioners will summon up many combinations and permutations of methods. This note provides an overview of the common practices. We note that none of these conventions is correct, per se. Research shows that market premia vary over time. Lacking a perfect forecast of equity returns, the analyst is left to wrest estimated required returns from arguable conventions, such as those described here. Rather than let the student thrash ineffectually, How do you think, how do you estimate the following risk-free rate, market risk premium, and beta.

How do I estimate the risk-free rate?