=+LG 1 P6–5 Nominal interest rates and yield curves Economic forecasters predict that the rate of inflation in Singapore will be at 3% over the next few decades. The following table shows the nominal interest paid on Treasury securities having different maturities.

Maturity Nominal rate of return 3 months 6%

2 years 7.5 5 years 8 10 years 10 20 years 12