Take the 2-minute tour ×
Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. It's 100% free, no registration required.

Are the historical data sets of short term treasury bill rates considered the same as the historical data sets of savings account interest rates because by definition they are both risk free rates of returns?

share|improve this question
    
That depends on how you intend to use the data. –  Joshua Ulrich Apr 19 at 12:54

1 Answer 1

From a note of P. Krugman (link):

enter image description here

So no it is not. Why ? I would say 3 cause:

First: Dynamics, saving rates are longterm figures. Offer and demand would be different for these products. Some time there is a lack of liquidity and a need of financement, so a huge demand in short term bonds.

Second: bank margin, reserve policies, they have to earn some money, they have to support some risk, follow rules and laws...

Third: risk free rates of returns is a theoretical construction, there is no such thing in real life. Some rates would approach it but wont be the same.

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.