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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