Purchase Solution

What is the real risk-free rate on a 5-Year Treasury Bond?

Not what you're looking for?

Ask Custom Question

5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*?

a. 2.59%
b. 2.88%
c. 3.20%
d. 3.52%
e. 3.87%

Purchase this Solution

Solution Summary

This solution explains how to determine the real risk-free rate interest rate with a simple formula and calculations.

Solution Preview

5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the ...

Purchase this Solution


Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.