Question: Question 4 (20 points) The inflation rate is expected to be 3.2% per year for the next two years and 3.8% per year thereafter. If

Question 4 (20 points) The inflation rate is expected to be

Question 4 (20 points) The inflation rate is expected to be 3.2% per year for the next two years and 3.8% per year thereafter. If the real interest rate is 2.4% per year, what is the yield on two- year Treasury securities? 1) 5.2% 2) 7.0% 3) 5.6% 4) 5.8% 5) 6.2%

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