Question
A 2-year Treasury security currently earns 1.77 percent. Over the next two years, the real risk-free rate is expected to be 1.30 percent per year
A 2-year Treasury security currently earns 1.77 percent. Over the next two years, the real risk-free rate is expected to be 1.30 percent per year and the inflation premium is expected to be 0.30 percent per year. Calculate the maturity risk premium on the 2-year Treasury security.
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Finance Applications And Theory
Authors: Marcia Cornett, Troy Adair, John Nofsinger
5th Edition
1260013987, 9781260013986
