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37 Assume that the real risk-free rate, r*, is 3% and that inflation is expected to be 8% in Year 1,5% in Year 2, and

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37 Assume that the real risk-free rate, r*, is 3% and that inflation is expected to be 8% in Year 1,5% in Year 2, and 4% thereafter. Assume also that all Treasury securities are highly liquid (LP = 0) and free of default risk. If a 5-year Treasury notes yields 10%, what is the maturity risk premiums

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