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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 32% and a

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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 32% and a 2-year Treasury bond yields 34%. a) What is the 1-year interest rate that is expected for Year 2? b) What inflation rate is expected during Year 2? O a) 36.03%; b) 35.53% a) 36.03%; b) 35.03% a) 37.03%; b) 35.53% O a) 35.53%; b) 36.03% O a) 36.53%; b) 36.53%

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