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Assume the real risk-free rate of return, r*, is 3.00 percent, and is expected to remain constant into the future. Following are the expected inflation

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Assume the real risk-free rate of return, r*, is 3.00 percent, and is expected to remain constant into the future. Following are the expected inflation rates for the next three years: Year 1 = 2.00%, Year 2 = 2.75%, and Year 3 = 3.25%. A. Calculate the interest rate for a one-, two-, and three-year bond. B. Based on the interest rates calculated in part B, what type of yield curve would you expect to see? Edit View Insert Format Tools Table 12pt Paragraph I BI U Avev Tv

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