You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:
a. Inflation premium = 3.25%
b. Liquidity premium = 0.6%
c. Maturity risk premium = 1.85%
d. Default risk premium = 2.15%
i. On the basis of these data, what is the real risk-free rate of return?
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