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Please answer both A and B! eBook Problem 5-4 Determinant of Interest Rates The real risk-free rate of interest is 3%. Inflation is expected to
Please answer both A and B!
eBook Problem 5-4 Determinant of Interest Rates The real risk-free rate of interest is 3%. Inflation is expected to be 3% this year and 6% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? Round your answer to two decimal places. What is the yield on 3-year Treasury securities? Round your answer to two decimal placesStep by Step Solution
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