<P> Since the risk - free rate can be obtained with no risk, any other investment having some risk will have to have a higher rate of return in order to induce any investors to hold it . </P> <P> In practice, to infer the risk - free interest rate in a particular situation, a risk - free bond is usually chosen--that is, one issued by a government or agency whose risks of default are so low as to be negligible . </P> <P> Risks that may be included are default risk, currency risk, and inflation risk . </P> <P> As stated by Malcolm Kemp in Chapter five of his book Market Consistency: Model Calibration in Imperfect Markets, the risk - free rate means different things to different people and there is no consensus on how to go about a direct measurement of it . </P>

Where do i find the risk free rate