The risk-free rate is the foundation of valuation; it represents what you can safely earn and is the base from which you build required returns for risky assets, making it essential to understand what constitutes truly safe investment.
definitionpending
Speaker
Aswath DamodaranEvidence Quote
“Risk-free rate is just the base from which you build off. Rather than make it a theoretical construct, think of it as this is what I would make if I made an absolutely safe investment or as close to that as I can get.”
Source
Aswath Damodaran: I Am More Cautious Than Ever— The Master Investor Podcast with Wilfred FrostCreated: 8/12/2026, 6:41:25 PM
My Notes
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