Question
The real risk-free rate is 3.05%, inflation is expected to be 2.60% this year, and the maturity risk premium is zero. Ignoring any cross-product terms,
The real risk-free rate is 3.05%, inflation is expected to be 2.60% this year, and the maturity risk premium is zero. Ignoring any cross-product terms, what is the equilibrium rate of return on a 1-year Treasury bond?
| 7.06% | ||
| 5.65% | ||
| 5.25% | ||
| 5.37% | ||
| 6.44% |
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. Mcguigan, William J. Kretlow
9th Edition
032416470X, 9780324164701
