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Maturity Risk Premiums Assume that the real risk - free rate, r * , is 3 % and that inflation is expected to be 7
Maturity Risk Premiums
Assume that the real riskfree rate, r is and that inflation is expected to be in Year in Year and thereafter. Assume also that all Treasury securities are highly liquid and free of default risk. If year and year Treasury notes both yield what is the difference in the maturity risk premiums MRPs on the two notes; that is what is MRP minus MRP Round your answer to one decimal place.
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