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Assume that the real risk-free rate is 0.5% and that the maturity risk premium is zero. A 1-year Treasury bond yield is 18% and a

Assume that the real risk-free rate is 0.5% and that the maturity risk premium is zero. A 1-year Treasury bond yield is 18% and a 2-year Treasury bond yields 20%. a) What is the 1-year interest rate that is expected for Year 2? b) What inflation rate is expected during Year 2?

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