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Suppose the expected path of one-year interest rates over the next three years is 2.9 percent, 3.6 percent, and 4.3 percent, the three-year term premium
Suppose the expected path of one-year interest rates over the next three years is 2.9 percent, 3.6 percent, and 4.3 percent, the three-year term premium is 0.8 per cent, and expected inflation is 1.9 per cent. What is theex antereal interest rate on a three-year bond?
A: 2.5 per cent
B: 2.4 per cent
C: 2.7 per cent
D: 2.6 per cent
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