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The speculators have to use a discount rate higher than the risk-free rate, otherwise why would they be doing real estate speculation instead of earning risk-fr
by ThrustVectoring 7y ago
The speculators have to use a discount rate higher than the risk-free rate, otherwise why would they be doing real estate speculation instead of earning risk-free interest?
Granted, the risk-free rate doesn't have to be above-inflation, but the real interest rate currently is positive in the US.