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8 of 12 (7 complete) HW Score: 58.33%, 7 of 12 pts Score: 0 of 1 pt Problem 2-11 (similar to) Question Help (Interest rate

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8 of 12 (7 complete) HW Score: 58.33%, 7 of 12 pts Score: 0 of 1 pt Problem 2-11 (similar to) Question Help (Interest rate determination) You've just taken a job at an investment banking firm and been given the job of calculating the appropriate nominal interest rate for a number of different Treasury bonds with different maturity dates. The real risk-free interest rate that you have been told to use is 3.1%, and this rate is expected to continue on into the future without any change. Inflation is expected to be constant over the future at a rate of 23%. Since these are bonds that are issued by the U.S. Treasury, they do not have any default risk or any liquidity risk (that is, there is no liquidity risk premium). The maturity risk premium is dependent upon how many years the bond has to maturity The maturity-risk premiums are shown in the popup window. Given this information, what should the nominal rate of interest on Treasury bonds maturing in 0-1 year, 1-2 years, 2-3 years, and 3-4 years bo? The nominal rate of interest on Treasu i Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) BOND MATURES IN: 0-1 year 1-2 years 2-3 years 3-4 years MATURITY-RISK PREMIUM: 0.07% 0.40% 0.75% 1.104 Print Done

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