- The risk free rate (RFR) means the volatility free rate, since risk is not volatility, but risk mean volatility in finance.
- RFR denotes something that does not exist and people are agreed that it is something unreal. However, is it even coherent?
- RFR denotes something with a sort of perfect stability. It is something measured in money with an unchanging growth or return. This requires that it be something immaterial and have that degree of stability. A debt contract is of this sort. It is not something material that produces, but an immaterial moral bond that demands a fixed return.
- With this immateriality, the volatility is to being between something stable and nothing. The RFR then further requires that the payment be certain. However, it is always possible that some payment will not or can not be made. A man can refuse to make a payment or whatever reason or he may not have the power to do so. This is always possible in a physical universe.
- RFR presupposes a physical universe for as the Philosopher shows, economics proceeds from rational need. However, the RFR is something that cannot exist in a physical universe. RFR is therefore incoherent.
- Put different, RFR is an anti-economical economical concept or it is an economical concept that contradicts economics.