Question: Problem #1 Problem #2 Problem #3 Please do 1 through 3 Click here to read the eBook: The Determinants of Market Interest Rates REAL RISK-FREE
Problem #1
Problem #2
Problem #3
Please do 1 through 3 Click here to read the eBook: The Determinants of Market Interest Rates REAL RISK-FREE RATE You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.6%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium-2.75% Liquidity premium-1.2% Maturity risk premium = 2% Default risk premium 2.3% On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. 9%
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