30-day T-bills are currently yielding 8 percent.
Current interest rate premiums:
Inflation premium: 5%
Liquidity premium: 1%
Maturity risk premium: 2%:
Default risk premium: 2%
Calculate the real risk-free rate of return.
The solution calculates the real risk-free rate of return using Inflation premium, Liquidity premium, Maturity risk premium, and Default risk premium.