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Real Risk-Free Rate, r* (5 Points) Pistol Pete's Platinum Palace has outstanding 5 year corporate bonds with a current yield of 6.50%. 5-Year T-Bonds have

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Real Risk-Free Rate, r* (5 Points) Pistol Pete's Platinum Palace has outstanding 5 year corporate bonds with a current yield of 6.50%. 5-Year T-Bonds have a current yield of 4.40%. The default risk premium for Pete's bonds is DRP-0.40%. The liquidity premium on Pete's bonds is 1.70%. The current inflation premium is 1.5% and the maturity risk premium on 5 year bonds is 0.40%. What is the real risk- free rate, r*

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