8% sy QUA Storchis op 2 Horne Insert Draw Layout Review View rial 10 B 1 Chapter 5 5. Assume that the real risk-free rate is 4% and the maturity risk premium is zero. If the nominal rate of interest on one-year bonds is 11% and on comparable-risk two-year bonds is 13%, what is the one-year Interest rate that is expected Year 2? What inflation rate is expected during Year 2? (2nts) Hint (res in year 1+ F in Year 2)/2 and pas in Year 2 = r* + inflation