You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.0%. Your brother-in-law,...
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You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.0%. 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 = 0.7% Maturity risk premium = 1.55% Default risk premium - 2.15% On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. % You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.0%. 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 = 0.7% Maturity risk premium = 1.55% Default risk premium - 2.15% 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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