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Assume that the real risk - free rate, r * , is 4 % and that inflation is expected to be 7 % in Year
Assume that the real riskfree rate, r is and that inflation is expected to be in Year in Year and thereafter. Assume also that all Treasury securities are highly liquid and free of default risk. If year treasury notes and year treasury notes both yield what is the difference in the maturity risk premiums on the two notes? ie what is MRP minus MRP
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