tag:blogger.com,1999:blog-2568941354104807757.post1442819026036678654..comments2023-10-05T09:07:24.225-04:00Comments on Investment Performance Guy: What IS risk-free?Dave Spauldinghttp://www.blogger.com/profile/01777929408680234896noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2568941354104807757.post-23016250373424857902010-06-07T17:52:16.458-04:002010-06-07T17:52:16.458-04:00Rishi, thanks for your note and post.
My point go...Rishi, thanks for your note and post.<br /><br />My point goes beyond countries that don't have their own risk free rate. Let's say that your client is US-based and that you invest in the UK for them: would you use the UK risk free rate? I'm sure many (perhaps even most) do; but why? I guess it's a matter of perspective. If I'm saying "instead of buying the UK corporate bonds I could have put you into a UK risk-free investment," then there's some value; or, if I say "instead of buying you the UK corporate bonds I could have put you into a US risk-free asset." Which makes more sense? <br /><br />The whole issue of "risk premium" is one that is somewhat controversial. Is the "risk free rate" that of the investment (i.e., the risk-free option in the issuer's country) or of the investor?<br /><br />If it's of the investment, then what you suggest might work, and then it's a matter of coming up with something that you feel is appropriate; if it's the investor, then it would be their home country.<br /><br />Part of this post was me "thinking out loud." I appreciate your comment and would have hoped others would chime in w/their thoughts on this, too.Dave Spauldinghttps://www.blogger.com/profile/01777929408680234896noreply@blogger.comtag:blogger.com,1999:blog-2568941354104807757.post-79325901945188668922010-06-07T16:16:09.306-04:002010-06-07T16:16:09.306-04:00Hi David...I am following your blogs since past fe...Hi David...I am following your blogs since past few months...needless to say, they are really very helpful...<br /><br />How about taking an average of the risk free rates of similar countries having similar economic characteristics as Vietnam (in this case)?<br /><br />Regards,<br />Rishi GajbhiyeRishi Gajbhiyehttps://www.blogger.com/profile/04171016052290889788noreply@blogger.com