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You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.4%. Your brother-in-law, a broker at Safe and Sound Securities, has given

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You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.4%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium = 2.5% Liquidity premium = 1.2% Maturity risk premium = 1.85% Default risk premium = 2.6% On the basis of these data, what is the real risk-free rate of return? %

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