What would be the interest rate on a 10-year Treasury note, given the following information? kpr = 1% MR = 0.1% for a 1-year loan, increasing by 0.1% each additional year. LR = 0.5% for a security with low liquidity and 1.0% for one with very low liquidity. DR= 0 for a 1-year loan, 0.1% for a 2-year loan, increasing by 0.15 % for each additional year. Expected inflation rates: Year 1 = 2.80% Year 2 = 4.2% Year 3 and thereafter: 5.0%

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To calculate the interest rate on a 10year Treasury note we need to consider the components of the F... View the full answer