4 Problem 6 03 EXPECTED INTEREST RATE The real risk free rate is 3 5 Inflation is expected to be 2 5 this year and 5 during the next 2 years Assume that the maturity risk premium is zero What is the yield on 2 year Treasury securities Do not round intermediate calculations Round your answer to two decimal places What is the yield on 3 year Treasury securities Do not round intermediate calculations Round your answer to two decimal places

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Question: 4. Problem 6.03 EXPECTED INTEREST RATE The real risk-free rate is 3.5%. Inflation is expected to be 2.5% this year and 5% during the next

4. Problem 6.03

EXPECTED INTEREST RATE

The real risk-free rate is 3.5%. Inflation is expected to be 2.5% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %
What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %

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