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The 1 - year safe real interest rate is 1 . 6 % , while the expected inflation is 3 . 3 % . Also,

The

1 -

year safe real interest rate is

1.6 %,

while the expected inflation is

3.3 % .

Also, the credit premium for AA bonds is

1.8 % .

What should be the

1 -

year Treasury Bill rate and the yield on

1 -

year AA bonds?

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