15. Problem 4-20 (Inflation Risk Premiums) eBook Inflation Risk Premiums Because of a recession, the inflation rate expected for the coming year is only 4%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 4%. Assume that the real risk-free rate is r* = 2% for all maturities and that there are no maturity risk premiums. If 3-year Treasury notes yield 2 percentage points more than 1-year notes, what inflation rate is expected after Year 1? Round your answer to the nearest whole number. % Grade it Now Save & Coinue Continue without saving