Question
2) Inflation is expected to be 2% for the next three years, then 5% for the next 7 years.What should the Inflation Premium be for
2) Inflation is expected to be 2% for the next three years, then 5% for the next 7 years.What should the Inflation Premium be for a ten-year security
(4) Suppose the real risk-free rate is 3.50% (k*), the average future inflation rate is 2.25%, and a maturity risk premium of 0.10% per year to maturity applies, i.e. MRP = 0.10(t)% where "t" is the years to maturity.What rate of return (k) would you expect on a 5-year Treasury security?
Trying to answer week 5 questions 2 and 4, any guidance would be appreciated.
I was speaking about the document I was reviewing, I thought the question area was interlinked with the specific document, apparently not.
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