Question
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 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 = 2.50%
- Liquidity premium = 0.7%
- Maturity risk premium = 1.40%
- Default risk premium = 2.00%
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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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Foster George, Srikand M. Datar, Maureen P. Gowing
5th Canadian Edition
0135004934, 978-0135004937
