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Please send me answer in type form strictly prohibited handwritten solution don't use chatgpt or copied content show your own work with step by step explanation do not miss any step, mention formula and concept.
Question-
The real risk-free rate is 3%. Inflation is expected to be 4% this year, 3% next year, and then 4% thereafter. The maturity risk premium is estimated to be 0.0007 x (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security? Do not round intermediate calculations. Round your answer to two decimal places.
Answer should be correct.
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