Hi, the risk-free rate of some countries can contain the default expectation (CRP) of the country (like Greece or Italy) and A. Damodaran has the adjustment procedure in his lectures. We subtract the CDS spread or Default spread (dollar denominated) from the YTM of the 10 year country bond. He gives the example of Brazil and I was wondering is it applicable to other countries like Russia or Kazakhstan???
The question is: if the YTM of 10 year bond of my country is not widely traded and just close to the base interest rate and REPO rate, should I do the same procedure as Aswath Damodaran reccommends? It doesn't make sense to me since I don't know whether investors put any expectation of default in the first place. Please, explain it to me.
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