Question
Expected Interest Rate The real risk-free rate is 2.25%. Inflation is expected to be 2.35% this year, 4.7% next year, and 2.55% thereafter. The maturity
Expected Interest Rate
The real risk-free rate is 2.25%. Inflation is expected to be 2.35% this year, 4.7% next year, and 2.55% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round your intermediate calculations. Round your answer to two decimal places.
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Personal Finance
Authors: Jeff Madura
7th Edition
0134989961, 978-0134989969
