30-day T-bills are currently yielding 3.5%. Inflation Premium = 2.1% Liquidity Premium = .8% Maturity risk premium

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Question:

30-day T-bills are currently yielding 3.5%.

Inflation Premium = 2.1%

Liquidity Premium = .8%

Maturity risk premium = 1.8%

Default risk premium = 3.17%

Based on the above information, what is the real risk-free rate of return?

Posted Date: May 13, 2024 03:10 AM

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30-day T-bills are currently yielding 3.5%. Inflation Premium = 2.1% Liquidity Premium = .8% Maturity risk premium

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The real riskfree rate of return can be calculated by subtracting the inflation premium from t... View the full answer

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