You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.6%. Your brother-in-law,...
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You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.6%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium 3.00% Liquidity premium = 1.0% Maturity risk premium Default risk premium 1.55% 2.15% On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. % You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.6%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium 3.00% Liquidity premium = 1.0% Maturity risk premium Default risk premium 1.55% 2.15% On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. %
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