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Suppose the inflation rate is expected to be 6 % next year, 5 % the following year, and 3 % thereafter. Assume that the real

Suppose the inflation rate is expected to be 6% next year, 5% the following year, and 3% thereafter. Assume that the real risk-free rate, r**, will remain at 2% and that maturity risk premiums on Treasury securities rise from zero on very short-term bonds (those that mature in a few days) to 0.2% for 1-year securities. Furthermore, maturity risk premiums increase 0.2% for each year to maturity, up to a limit of 1.0% on 5-year or longer-term T-bonds.
a. Calculate the interest rate on 1-,2-,3-,4-,5-,10-, and 20-year Treasury securities. Round your answers to two decimal places.
\table[[Treasury securities,Interest rate],[1-year,%
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