Question: Problem 6-3 Expected Interest Rate The real risk-free rate is 3.5%. Inflation is expected to be 1.5% this year and 4.25% during the next 2

Problem 6-3 Expected Interest Rate The real risk-free rate is 3.5%.

Problem 6-3 Expected Interest Rate The real risk-free rate is 3.5%. Inflation is expected to be 1.5% this year and 4.25% during the next 2 years. Assume that the maturity risk premium is zero. a. What is the yield on 2-year Treasury securities? Round your answer to two decimal places. b. What is the yield on 3-year Treasury securities? Round your answer to two decimal places

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