REAL RISK-FREE RATE You read in The Wall Street Journal that 30-day T-bills are currently yielding 5
Question:
REAL RISK-FREE RATE You read in The Wall Street Journal that 30-day T-bills are currently yielding 5 5%. 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 25%
• Liquidity premium = 0 6%
• Maturity risk premium = 1 8%
• Default risk premium = 2 15%
On the basis of these data, what is the real risk-free rate of return?
AppendixLO1
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals Of Financial Management Concise Edition
ISBN: 9781285065137
8th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Question Posted: