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Inflation Risk Premiums Because of a recession, the inflation rate expected for the coming year is only 5 % . However, the inflation rate in
Inflation Risk Premiums
Because of a recession, the inflation rate expected for the coming year is only However, the inflation rate in Year and thereafter is expected to be constant at some level above Assume that the real riskfree rate is r for all maturities and that there are no maturity risk premiums. If year Treasury notes yield percentage points more than year notes, what inflation rate is expected after Year Round your answer to the nearest whole number.
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