This page works through issues with the Rf in the CAPM. The fundamental problem is that a long-term bond is subject to uncertainty with respect to inflation.
![](https://edbodmer.com/wp-content/uploads/2021/11/image-1-1024x436.png)
The annual average of 10-year bonds is illustrated below.
![](https://edbodmer.com/wp-content/uploads/2021/11/image-2-1024x743.png)
Edward Bodmer – Project and Corporate Finance
Resolving BS in Project Finance
This page works through issues with the Rf in the CAPM. The fundamental problem is that a long-term bond is subject to uncertainty with respect to inflation.
The annual average of 10-year bonds is illustrated below.