Question: eBook Problem 6-3 Expected Interest Rate The real risk-free rate is 2.25%. Inflation is expected to be 1.5% this year and 4.5% during the next
eBook Problem 6-3 Expected Interest Rate The real risk-free rate is 2.25%. Inflation is expected to be 1.5% this year and 4.5% during the next 2 years. Assume that the maturity risk premium is zero a. What is the yield on 1-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. b. 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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