Question
Problem 6-9 Expected Interest Rate The real risk-free rate is 2.25%. Inflation is expected to be 2.45% this year, 4.25% next year, and 2% thereafter.
Problem 6-9 Expected Interest Rate
The real risk-free rate is 2.25%. Inflation is expected to be 2.45% this year, 4.25% next year, and 2% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round your intermediate calculations. Round your answer to two decimal places.
%
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
12th Edition
1439044473, 978-1439044476
