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Show all work. 4. A three-year Treasury security currently earns 2.11 percent. Over the next three years, the real risk-free rate is expected to be
Show all work.
4. A three-year Treasury security currently earns 2.11 percent. Over the next three years, the real risk-free rate is expected to be 1.2 percent per year, and the inflation premium is expected to be 0.60 percent per year. What's the maturity risk premium on the three-year Treasury security?
A. 1.44 percent
B. 0.44 percent
C. 0.31 percent
D. 2.71 percent
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