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rate ponds? 12 MATURITY RISK PREMIUM An investor in Treasury securities expects inflation to be r 1, 2.7% in Year 2, and 3.65% each year

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rate ponds? 12 MATURITY RISK PREMIUM An investor in Treasury securities expects inflation to be r 1, 2.7% in Year 2, and 3.65% each year thereafter. Assume that the real rate is 1.95% and that this rate will remain constant. Three-year Treasury 2.1% in Yea risk-free securities yield 5.20%, while 5-year Treasury securities yield 6.00%, what is the difference in the maturity risk premiums ( is MKPs-MRP? MRPs) on the two securities; that is, what

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