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You read in the Washington Post that 30-day T-bills are currently yielding 4.5%. Your brother-in-law, a...

You read in the Washington Post that 30-day T-bills are currently yielding 4.5%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:

  • Inflation premium = 2.75%
  • Liquidity premium = 0.2%
  • Maturity risk premium = 1.85%
  • Default risk premium = 2.90%

On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places.

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