MktRf
MktRf, also known as the market risk premium, is a financial metric used in the Capital Asset Pricing Model (CAPM) to represent the excess return of the market portfolio over the risk-free rate. It is a crucial component in calculating the expected return of an asset or portfolio. The market portfolio is a hypothetical portfolio that includes all investable securities, weighted by their market capitalization. The risk-free rate is the return on an investment with zero risk, typically represented by the yield on government bonds.
The market risk premium is calculated as the difference between the expected return of the market portfolio
In the CAPM, the market risk premium is used to determine the required return on an asset
The market risk premium is an essential concept in finance as it provides a benchmark for evaluating