B. Using the expected real rate of interest from Part A, if the maturity risk premium is expected to be zero, determine the inflation premium on the Treasury note.

Inflation premium =____________

Question 15 Assume that the interest rate on a one-year Treasury bill is 5.1 percent and the rate on a two-year Treasury note is 7.3 percent. (a) If the expected real rate of interest is 2.4 percent, determine the inflation premium on the Treasury bill. (Round answer to 1 decimal place, e.g. 527.5.) Inflation premium % Attempts: 0 of 2 used