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An investor in Treasury securities expects inflation to be 14,25% in Year 1, 12,20% in Year 2, 9,60% in Year 3 and 8,00% each year

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An investor in Treasury securities expects inflation to be 14,25% in Year 1, 12,20% in Year 2, 9,60% in Year 3 and 8,00% each year thereafter. Assume that the real risk-free rate is 2,00% and that this rate will remain constant. Three-year Treasury securities yield 12,77%, while 5-year Treasury securities yield 13,71%. What is the difference in the maturity risk premiums (MRPs) on the two securities; that is what is MRP5 - MRP3

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