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eBook An investor in Treasury securities expects inflation to be 1.7% in Year 1, 2.6% in Year 2, and 3.35% each year thereafter. Assume
eBook An investor in Treasury securities expects inflation to be 1.7% in Year 1, 2.6% in Year 2, and 3.35% each year thereafter. Assume that the real risk-free rate is 2.55% and that this rate will remain constant. Three-year Treasury securities yield 5.20%, while 5-year Treasury securities yield 6.00%. What is the difference in the maturity risk premiums (MRPS) on the two securities; that is, what is MRPS MRP3? Do not round Intermediate calculations. Round your answer to two decimal places. % 200
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