An investor in Treasury securities expects inflation to be 2.0% in Year 1, 2.5% in Year...
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An investor in Treasury securities expects inflation to be 2.0% in Year 1, 2.5% in Year 2, and 3.65% each year thereafter. Assume that the real risk-free rate is 2.15% and that this rate will remain constant. Three-year Treasury securities yield 6.30 %, while 5-year Treasury securities yield 8.00%. What is the difference in the maturity risk premiums (MRPS) on the two securities; that is, what is MRPS - MRP3? Do not round intermediate calculations. Round your answer to two decimal places. % An investor in Treasury securities expects inflation to be 2.0% in Year 1, 2.5% in Year 2, and 3.65% each year thereafter. Assume that the real risk-free rate is 2.15% and that this rate will remain constant. Three-year Treasury securities yield 6.30 %, while 5-year Treasury securities yield 8.00%. What is the difference in the maturity risk premiums (MRPS) on the two securities; that is, what is MRPS - MRP3? Do not round intermediate calculations. Round your answer to two decimal places. %
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