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Determinant of Interest Rates The real risk-free rate of interest is 4%. Inflation is expected to be 2% this year and 6% during the next

Determinant of Interest Rates

The real risk-free rate of interest is 4%. Inflation is expected to be 2% this year and 6% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Round your answer to two decimal places. %

What is the yield on 3-year Treasury securities? Round your answer to two decimal places. %

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