Now its time for you to practice what youve learned. Suppose the real risk-free rate of interest is r*=5% and it is expected to remain constant over time. Inflation is expected to be 1.40% per year for the next 2 years and 3.50% per year for the next 4 years. The maturity risk premium is 0.1(t1)% , where t is number of years to maturity, a liquidity premium is 0.55%, and the default risk premium for a corporate bond is 1.30%.

The yield on a 3-year Treasury bond
The yield on a 3-year corporate bond
The yield on a 6-year Treasury bond
The yield on a 6-year corporate bond
Expected inflation in 7 years, if the yield on a 7-year Treasury bond is 8.70%