Question: Problem 6-3 Expected Interest Rate The real risk-free rate is 3%. Inflation is expected to be 2% this year and 3.75% during the next 2

Problem 6-3 Expected Interest Rate

The real risk-free rate is 3%. Inflation is expected to be 2% this year and 3.75% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. ___________%

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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