Question
You read in The Wall Street Journal that 30-day T-bills are currently yielding 6.0%. 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 6.0%. 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 = 0.3%
- Maturity risk premium = 2.30%
- Default risk premium = 2.75%
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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Competing On Analytics The New Science Of Winning
Authors: Thomas H Davenport, Jeanne G Harris, Gary Loveman
1st Edition
1422103323, 9781422103326
