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An investor in Treasury securities expects inflation to be 2.4% in Year 1, 3.2% in Year 2, and 4.15% each year thereafter. Assume that the

image text in transcribed An investor in Treasury securities expects inflation to be 2.4% in Year 1, 3.2\% in Year 2, and 4.15\% each year thereafter. Assume that the real risk-free rate is 2.55% and that this rate will remain constant. Three-year Treasury securities yield 5.20%, while 5-year Treasury securities yield 6.00%. What is the difference in the maturity risk premiums (MRPs) on the two securities; that is, what is MRP5MRP3 ? Do not round intermediate calculations. Round your answer to two decimal places. % An investor in Treasury securities expects inflation to be 2.4% in Year 1, 3.2\% in Year 2, and 4.15\% each year thereafter. Assume that the real risk-free rate is 2.55% and that this rate will remain constant. Three-year Treasury securities yield 5.20%, while 5-year Treasury securities yield 6.00%. What is the difference in the maturity risk premiums (MRPs) on the two securities; that is, what is MRP5MRP3 ? Do not round intermediate calculations. Round your answer to two decimal places. %

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