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: Inflation premium=3.25%. Liquidity premium=0.6%. Maturity risk premium=1.85%. Default risk premium=2.15%. On the basis of these data, what is the real risk-free rate of return?
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