Question
A 2-year Treasury security currently earns 4.00 percent. Over the next two years, the real interest rate is expected to be 2.13 percent per year
A 2-year Treasury security currently earns 4.00 percent. Over the next two years, the real interest rate is expected to be 2.13 percent per year and the inflation premium is expected to be 1.33 percent per year. What is the maturity risk premium on the 2-year Treasury security?
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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
