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Check My Work (2 remaining) 9 eBook An investor in Treasury securities expects Inflation to be 1.6% in Year 1, 2.0% in Year 2, and
Check My Work (2 remaining) 9 eBook An investor in Treasury securities expects Inflation to be 1.6% in Year 1, 2.0% in Year 2, and 3.05% each year thereafter. Assume that the real risk-free rate is 1.65% and that this rate will remain constant. Three-year Treasury securities yield 5.50%, while 5-year Treasury securities yield 7.00%. What is the difference in the maturity risk premiums (MRP) on the two securities; that is, what is MRP3 - MRP37 Do not round Intermediate calculations. Round your answer to two decimal places. %
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