Question: A two year treasury security currently earns 1.77%. Over the next two years, the real risk free rate is expected to be 1.30% per year

A two year treasury security currently earns 1.77%. Over the next two years, the real risk free rate is expected to be 1.30% per year and the inflation premium is expected to be 0.30% per year. Calculate the maturity risk premium on the two-year treasury security.

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