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Question 15 (1 point) Assume that the expected inflation rate for Year 1 is 10%; for Year 2 is 9%; for Year 3 is 8%;

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Question 15 (1 point) Assume that the expected inflation rate for Year 1 is 10%; for Year 2 is 9%; for Year 3 is 8%; and for Year 4 and thereafter is 2%. Assuming a real risk-free rate of 2.0% and a maturity risk premium that equals (0.1 x (t)]%, where t is the number of years to maturity, estimate the interest rate for a 39- Year Treasury security. 4.54% 7.90% 8.44% 2.00%

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