Question: Please work out Problem The real risk-free rate is 3.30%, inflation is expected to be 4.25% this year, and the maturity risk premium is zero.

Please work out Problem

The real risk-free rate is 3.30%, inflation is expected to be 4.25% this year, and the maturity risk premium is zero. Taking account of the cross-product term, i.e., not ignoring it, what is the equilibrium rate of return on a 1-year Treasury bond? (Round your final answer to 3 decimal places.)

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