The $30-$day T$-$bills have a current yield of $6\mathrm{.}4\%$ with inflation premium at $3\mathrm{.}5\%,$ liquidity premium at $1\mathrm{.}25\%,$ maturity risk premium at $2\mathrm{.}15\%,$ and default risk premium at $2\mathrm{.}75\%.$ What is the real risk$-$free rate of return?

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The real riskfree rate of return represents the return on an investment with no risk of default or i... View the full answer