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D. An investor in Treasury securities expects inflation to be 2.5% in Year 1, 3.2% in Year 2, and 3.8% each year thereafter. Assume that
D. An investor in Treasury securities expects inflation to be 2.5% in Year 1, 3.2% in Year 2, and 3.8% each year thereafter. Assume that the real risk-free rate is 2.75% and that this rate will remain constant. Three- year Treasury securities yield 5.75%, while 5-year Treasury securities yield 6.50%. What is the difference in the maturity risk premiums (MRPs) on the two securities; that is, what is MRPs -MRP
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