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If the real risk-free rate is 5% and inflation is expected to be 3% this year, 4% next year and 3.5% thereafter. The MRP is

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If the real risk-free rate is 5% and inflation is expected to be 3% this year, 4% next year and 3.5% thereafter. The MRP is 0.05(t-1) %, where t is number of years to maturity. Find the yield on a 7-year Treasury note. (Hint: Find the IP, which is linked to the inflation rate I, then use the interest rate equation.) 8.1% 8.8% 4.9% 6.7%

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