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You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your brother-in-law, a broker at Safe and Sound Securities, has
You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium = 3.00% Liquidity premium = 1.2% Maturity risk premium = 2.30% Default risk premium = 2.45% On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. %
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Public Finance
Authors: John E. Anderson
2nd edition
978-0538478441, 538478446, 978-1133708360, 1133708366, 978-1111526986
