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Calculate the real risk free interest rate. What can you conclude regarding the yield curve direction ? 3 mth U.S. Treasury Bill rate % (risk
Calculate the real risk free interest rate. What can you conclude regarding the yield curve direction ?
| 3 mth U.S. Treasury Bill rate % (risk free) | 30yr U.S.Treasury int. rate % | 30 yr corp AAA bonds int. rate | Inflation premium | Liquidity risk premium | |
| 20th March 2022 | 0.51% | 2.50% | 3.00% | 8.00% | 0.02% |
| 14th April 2022 | 0.72% | 2.90% | 3.72% | 8.00% | 0.02% |
| Nominal int. rate = | real | risk-free | int. |
| + | inflation | premium | |
| + | Default-risk | premium | |
| + | Maturity-risk | premium | |
| + | Liquidity-risk | premium |
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The Handbook Of Financing Growth
Authors: Kenneth H. Marks, Larry E. Robbins, Gonzalo Fernandez, John P. Funkhouser, D. L. Williams
2nd Edition
