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Determine the real risk-free rate of return

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Question - You read in The Wall Street Journal that 60-day T-bills are currently yielding 9.5%. Your brother-in-law, a broker, has given you the following estimates of current interest rate pre- miums: Inflation premium = 6.5%. Liquidity premium = 1.15%. Maturity risk premium = 2.50%. Default risk premium = 2.22%. On the basis of these data, determine the real risk-free rate of return?

Reference no: EM133180854

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