# You are considering investing money in Treasury bills and wondering what the real risk-free rate of interest

## Question:

You are considering investing money in Treasury bills and wondering what the real risk-free rate of interest is. Currently, Treasury bills are yielding 4 percent and the future inflation rate is expected to be 2 percent per year. Ignoring the cross product between the real rate of interest and the inflation rate, what is the real risk-free rate of interest?

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**Related Book For**

## Foundations Of Finance

**ISBN:** 9781292318738

10th Global Edition

**Authors:** Arthur Keown, John Martin, J. Petty