You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your...
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You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium = 3.25% Liquidity premium 1.2% Maturity risk premium = 1.55% Default risk premium = 2.30% 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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