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Could you please help me to answer these questions: Question 7 (1 point) Interest rates on 2-year Treasury securities are currently 8.00%, while 5-year Treasury
Could you please help me to answer these questions:
Question 7 (1 point) Interest rates on 2-year Treasury securities are currently 8.00%, while 5-year Treasury securities yield 16.00%. If the pure expectations theory is correct, what does the market believe that 3-year securities will be yielding 2 years from now? O24.00% 21.66% 22.66% 20.66% Previous Page Page 7 of 15 h Next Page 67F ^ ) ENG o Question 11 (1 point) An investor in Treasury securities expects inflation to be 2.0% in Year 1, 3.0% in Year 2, and 4.0% each year thereafter. Assume that the real risk-free rate is 0.75% and that this rate will remain constant. Three-year Treasury securities yield 6.00%, while 30-year Treasury securities yield 10.00%. What is the difference in the maturity risk premiums (MRPs) on the two securities? 7.600% 3.100% 5.350% 2.250% Page 11 of 15 Previous Page Next PageStep by Step Solution
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