Question
You read in The Wall Street Journal that one-month Treasury bills are currently yielding 5.87%. Your brother-in-law, a broker at Safe and Sound Securities, has
You read in The Wall Street Journal that one-month Treasury bills are currently yielding 5.87%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:
- Inflation premium = 3.24%
- Liquidity premium = 0.73%
- Maturity risk premium = 1.82%
- Default risk premium = 2.45%
What is the real risk-free rate of return?
| a | 5.14% |
| b | 2.63% |
| c | 4.05% |
| d | 3.42% |
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Essentials Of Health Care Finance
Authors: William O. Cleverley, James O. Cleverley
8th Edition
1284094634, 978-1284094633
