5 Year Treasury Notes are currently yielding 6.00%, and you have found the following interest premium that relate to this investment: • Inflation premium 1.75% Liquidity premium 0.00% • Default risk premium 0.00% Maturity risk premium 1.50% Given the above information, what is the real risk-free rate of return?

5 Year Treasury Notes are currently yielding 6.00%, and you have found the following interest premium that relate to this investment: • Inflation premium 1.75% Liquidity premium 0.00% • Default risk premium 0.00% Maturity risk premium 1.50% Given the above information, what is the real risk-free rate of return?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 6P

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