A gentle reminder that risk only equals volatility in academia.
True financial risk is the chance of losing your purchasing power over time.
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“Let’s use the t-bill as our risk free rate” - some academic with zero Bitcoin
It’s the trap of focusing only on what can be modelled even if it doesn’t match the real world (which it can’t precisely because it’s a model).
Or all at once because ownership didn't mean what you thought it meant. Bitcoin fixes both.
Because it literally is risk free... 😂
Using the inflation-adjusted or “money supply-adjusted” T-bill rate as the “risk-free rate” could seem reasonable.