What should be the yield of the us treasury bills

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Question - You require a risk premium of 3.5 percent on risky investments. The pure rate of interest in the market is 5.5 percent and the inflation premium is 2.5 percent. US Treasury bills are risk free. What should be the yield of the US Treasury bills? Use exact formulation.

A. 5.58%

B. 8.14%

C. 7.62%

D. 6.60%

E. 6.09%

F. 7.11%

Reference no: EM132049696

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