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Real Risk - Free Rate, r * Pistol Pete's Platinum Palace has outstanding 5 year corporate bonds with a current yield of 7 . 5

Real Risk-Free Rate, r*
Pistol Pete's Platinum Palace has outstanding 5 year corporate bonds with a current yield of 7.50%.5-Year T-Bonds have a current yield of 4.00%. The default risk premium for Pete'sbonds is DRP =1.40%. The current inflation premium is 2.5%. What is the real risk-free rate, r*?

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