5-Year Treasury Bonds Yield 6

Question 68
Multiple Choice

5-year Treasury bonds yield 6.1%.The inflation premium (IP)is 1.9%,and the maturity risk premium (MRP)on 5-year T-bonds is 0.4%.There is no liquidity premium on these bonds.What is the real risk-free rate,r*? A) 3.80% B) 3.42% C) 3.69% D) 4.45% E) 4.03%