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*5-19) Risk niums Assume that the real risk-free rate, r', is 3% and that inflation is expected to be 8% in Year 1,5% in Year

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*5-19) Risk niums 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 and free of default risk. If 2-year and 5-year Treasury notes both yield 10%, what is the difference in the maturity risk premiums (MRP) on the two notes; that is, what is MRP, minus MRP

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