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eBook Problem 6-2 Real Risk-Free Rate You read in The Wall Street Journal that 30-day T bills are currently yielding 5.2%. Your brother-in-law, a broker
eBook Problem 6-2 Real Risk-Free Rate You read in The Wall Street Journal that 30-day T bills are currently yielding 5.2%. 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-0.4% Maturity risk premium 1.7% Default risk premium-2.75% 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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