While calculating economic damages,application of a risk-free rate allows the plaintiff to replicate the lost earnings stream by reinvesting the damages award in safe investments.

Question

Quizplus · Accepted Answer

The use of a risk-free rate in economic damages calculations assumes that the plaintiff would reinvest the damages award in a safe investment that provides a guaranteed rate of return. This allows the plaintiff to replicate the lost earnings stream they would have received from the original investment or business venture. Therefore, the statement is true.

While Calculating Economic Damages,application of a Risk-Free Rate Allows the Plaintiff