Risk Free Rate for Multi Factor Models vs Build Up Models

archived_user

New member
Joined
Jun 18, 2026
Messages
0
Reaction score
0
Is my understanding correct? Below is what I’m seeing on mocks. I think knowing this concept will be good for a point or two on the exam.
Multi-Factor Models (have Betas): Use Short-Term Risk Free Rate
Build Up Models (No Betas): Use Long-term Risk Free Rate
 
Also correct. And to be clear, multi-factor models includes Fama-French, Carhart, Pastor-Stambaugh as well
 
Back
Top