Question
The Wall Street Journal that 30-day T-bills are currently yielding 5.1%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following
The Wall Street Journal that 30-day T-bills are currently yielding 5.1%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:
- Inflation premium = 3.50%
- Liquidity premium = 0.2%
- Maturity risk premium = 2.30%
- Default risk premium = 2.60%
On the basis of these data, what is the real risk-free rate of return?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
