I am not understanding how to get the risk free rate of return from a question in my text book. Below is the information:
You have finally saved $10,000 and are ready to make your first investment. You have the three following alternatives for investing that money:
Capital City ABC, Inc. Bonds with a par value of $1,000, that pays an 8.75 percent on its par value in interest, sells for $1,314, and matures in 12 years.