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The real risk-free rate is 3%. Inflation is expected to be 3.05% this year, 3.8% next year, and 3.45% thereafter. The maturity risk premium is
The real risk-free rate is 3%. Inflation is expected to be 3.05% this year, 3.8% next year, and 3.45% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note?
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