Question
Your US-based firm is evaluating a project in France with cash flows in Euros. Which of the following rates should you use as a risk-free
Your US-based firm is evaluating a project in France with cash flows in Euros. Which of the following rates should you use as a risk-free rate?
US Treasury- 3 month 0.50%
US Treasury- 10 year 2.90%
US Treasury Inflation-Indexed- 10 year -0.12%
France Government Debt- 10 year 1.37%
Germany Government Debt- 10 year 0.85%
AAA-rated Euro Area Central Government Bond- 10 year 0.92%
a. US Treasury- 3 month
b. US Treasury- 10 year
c. US Treasury Inflation-Indexed 10-year
d. France Government Debt- 10-year
e. Germany Government Debt- 10-year
f. AAA-rated Euro Area Central Government Bond- 10-year
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