Question
The real risk-free rate is 2.15%. Inflation is expected to be 3.15% this year, 4.85% next year, and 2.1% thereafter. The maturity risk premium
The real risk-free rate is 2.15%. Inflation is expected to be 3.15% this year, 4.85% next year, and 2.1% thereafter. The maturity risk premium is estimated to be 0.05 x (t 1)%, where t number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places. %
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Financial Management Theory and Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
2nd Canadian edition
176517308, 978-0176517304
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