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EXPECTED INTEREST RATE The real risk-free rate is 2.75%. Inflation is expected to be 2% this year and 5% during the next 2 years. Assume

EXPECTED INTEREST RATE

The real risk-free rate is 2.75%. Inflation is expected to be 2% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %

What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %

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