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Suppose the real risk-free rate in 3.50%, the average future inflation rate is 2.25%, and a maturity risk premium of 0.10% - 1 per year
Suppose the real risk-free rate in 3.50%, the average future inflation rate is 2.25%, and a maturity risk premium of 0.10% - 1 per year to maturity applies, i.e., MRP = .10( t-1)%, where "t" is the years to maturity. What rate of return would you expect on a 5-year Treasury Security?
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