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Suppose the real risk - free rate is 3 . 2 % , the average future inflation rate is 1 . 9 % , and
Suppose the real riskfree rate is the average future inflation rate is and a maturity premium of per year to maturity applies, ie MRP where is the years to maturity. What rate of return would you expect on a year Treasury security, assuming the pure expectations theory is NOT valid?
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