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EXPECTED INTEREST RATE The real risk-free rate is 3%. Inflation is expected to be 2.25% this year and 4% during the next 2 years. Assume
EXPECTED INTEREST RATE
The real risk-free rate is 3%. Inflation is expected to be 2.25% this year and 4% 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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