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ou 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
ou read inThe Wall Street Journalthat 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 = 3.5%
- Liquidity premium = 0.9%
- Maturity risk premium = 1.7%
- Default risk premium = 2.75%
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