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You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.2%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium = 2.75% Liquidity premium = 0.7% Maturity risk premium = 1.7% Default risk premium = 2.9% 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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Financial Management, Finance

Category:- Financial Management
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