Question: 6 - 3 EXPECTED INTEREST RATE The real risk - free rate is 2 . 2 5 % . Inflation is expected to be 2

6-3
EXPECTED INTEREST RATE The real risk-free rate is 2.25%. Inflation is expected to be 2.5% this year and 4.25% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury securities?

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