we as a country that has a real risk free rate of 2 percent, expected inflation rate:

Year 1(Jan 2020)2.0 percent

Year 2 (Jan 2021)3.0 percent

Year 3(Jan 2022)3.0 percent

Calculate the average interest rates for three investments which mature in one year, two years, and three years.Draw a yield curve for this economy for assets maturing at different dates starting Jan 2020. Define what type of yield curve it is i.e. abnormal etc.

Answer rating: 100% (QA)

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