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Real risk-free rate is currently 1.5%. A broker at INV Securities, has given you the following estimates of current interest rate premiums: Inflation: 2% ,
Real risk-free rate is currently 1.5%. A broker at INV Securities, has given you the following estimates of current interest rate premiums: Inflation: 2% , Liquidity Risk Premium 1% , Maturity Risk Premium 2%, and Default Risk Premium 1%. Based on these data, what are the rates of short- term Treasuries? * You need to show your calculation in your exam worksheet! 3.5% 6.5% 5.5% 4.5%
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