Study On The Choosing Of Risk-free Interest Rate In Financial Assets Pricing

Risk-free interest rate is the origin point of financial assets pricing. Financial assets pricing,from the traditional Dividend Discount Model(DDM) to the non-arbitrage equilibrium analysis, all need a benchmark interest rate,that is the problem of choosing a risk-free interest rate. Only when a right risk-free interest rate is chosen could the intrinsic value of financial asset be priced accurately,thus guaranteeing the financial market stable and healthy development.This article,which is purposed on how to choose a risk-free interest rate in financial assets pricing, makes a comprehensive use of the theory of modern finance and statistics, qualitative analysis and quantitative analysis, theory analysis and practical analysis. Considered the market factors and the investment subject factors.the article is based on market equilibrium to profoundly study the risk-free interest rate and puts forward a theoretical model which is used to estimate the risk-free interest rate.Because of the model proposed,the research of the risk-free interest rate is rised from qualitative analysis to quantitative analysis and changes the thinking mode of a single low-risk interest rate instead of the risk-free interest rate.