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Although Rf can be negative (but not too negative), Rm cannot be less than Rf as in your example. It is a non-equilibrium situation, no one would invest in risky securities if they have an expectation lower than risk-free securities. So Rm > Rf is a necessary assumption of the CAPM, whether rates are positive or negative. Also, algebra is algebra and the ...


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If you owe money to the bank, you will not receive a compensation. It might not exactly correspond to what you want, but here is my understanding. If we refer to the origin of the rates formation, you see two rates. e.g : https://www.ecb.europa.eu/mopo/implement/sf/html/index.en.html the marginal lending rate this one cannot be negative, ECB will not ...



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