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Question 7 5 pts Treasury securities that mature in 3 years currently have an interest rate of 9%. Inflation is expected to be 5%, 6%,

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Question 7 5 pts Treasury securities that mature in 3 years currently have an interest rate of 9%. Inflation is expected to be 5%, 6%, and 7% in the next three years. The maturity risk premium is estimated to be 0.1%(t-1), where t is equal to the maturity of the bond (i.e., the maturity risk premium of a one-year bond is zero). The real risk-free rate is assumed to be constant over time. What is the real risk-free rate of interest? Hint: Treasury securities have default risk premium (DRP) and liquidity risk premium (LP) zero. O 2.0% O 2.5% O 2.8% O 3.0%

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