What the real risk-free rate of return is


You read in the Wall Street Journal that 30-day US treasury bills are currently yielding 8%. Your brother in law, a broker, a broker at Kyoto Securities, has given you the following estimates of current interest rate premiums:

inflation premium= 5.0%
liquidity premium= 1.0%
maturity risk premium= 2.0%
default risk premium= 2.0%

Based on this data, what the real risk-free rate of return is: ?

 

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Accounting Basics: What the real risk-free rate of return is
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