The real free rate is 2%. Inflation is expected to be 3% this year, 4% next year,

Question:

The real free rate is 2%. Inflation is expected to be 3% this year, 4% next year, and 3.5% thereafter. The risk premium is estimated to be 0.005 ( (t - 1), where t = number of years to What is the nominal interest rate on a 7 year government security? (Average the expected inflation rates to determine the inflation premium, IP.)
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...