16 m Vield 5. If the pure expectations theory is correct, what does the market believe that year securities will be yielding 4 years from now? EXPECTED INTEREST RATE The real risk-free rate is 3%. Inflation is expected to be this year, 45 next year, and 39%, thereafter. The maturity risk premium is estimated to be 0.05 (t-1% where t = number of years to maturity. What is the yield on a 7-year Treasury