Suppose the return on a 10-year Treasury bond is 8.20 percent and that on a 10-year Treasury Inflation Protected Security (TIPS) is 2.00 percent. Suppose also that the maturity risk premium on all 10-year bonds is 0.90 percent and that no liquidity risk premium is required on any Treasury security. The expected average inflation rate for the next 10 years is (approximately): Your Answer: Answer units Previous Page Next Page Page 12 of 25