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5. Problem 6.12 (Maturity Risk Premium) eBook An investor in Treasury securities expects inflation to be 2.45% in Year 1, 3.15% in Year 2, and

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5. Problem 6.12 (Maturity Risk Premium) eBook An investor in Treasury securities expects inflation to be 2.45% in Year 1, 3.15% in Year 2, and 4.3% each year thereafter. Assume that the real risk-free rate is 1.95% and that this rate will remain constant. Three-year Treasury securities yield 6.70%, while 5-year Treasury securities yield 7.50%. What is the difference in the maturity risk premiums (MRPs) on the two securities; that is, what is MRP5 - MRP3? Do not round intermediate calculations. Round your answer to two decimal places. %

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