“Even if there were no market reaction, whatsoever, investors would be contending with one of the bedrock concepts in modern finance: the risk-free rate. The idea that a risk-free rate may no longer exist seems to have taken away one frame of reference.”

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“Even if there were no market reaction, whatsoever, investors would be contending with one of the bedrock concepts in modern finance: the risk-free rate. The idea that a risk-free rate may no longer exist seems to have taken away one frame of reference.”

—Otis Casey, director of credit research at Markit, on the reaction of investors to the Standard & Poor’s downgrade of the U.S. sovereign debt.

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