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Q5. The real risk-free rate r*, is 2%. Inflation is expected to average 3% a year for the next 2 years. A 2-year Treasury security

Q5. The real risk-free rate r*, is 2%. Inflation is expected to average 3% a year for the next 2 years. A 2-year Treasury security yields 6.2%. What is the maturity risk premium for the 2-year security? Risk free rate = real risk-free rate + inflation risk premium = ? Maturity risk premium for the 2-year treasury inflation risk prmium

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