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Suppose the real risk-free rate of interest is 3% and inflation is expected to be 2% and 3% over the next two years. If a
Suppose the real risk-free rate of interest is 3% and inflation is expected to be 2% and 3% over the next two years. If a 2-year Treasury security yields 6%, what is the maturity risk premium for the 2-year Treasury security? A) 1.0% B) 0.5% C) 0.2% D) 1.5%
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