Question
You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.4%. Your brother-in-law, a broker at Safe and Sound Securities, has given
You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.4%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:
- Inflation premium = 2.75%
- Liquidity premium = 0.5%
- 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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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
