Question
The real risk-free rate of interest is 1%. Inflation is expected to be 5% this year and 6% during the next 2 years. Assume that
The real risk-free rate of interest is 1%. Inflation is expected to be 5% this year and 6% during the next 2 years. Assume that the maturity risk premiums is zero. What is the yield on 1-year treasury securities? Write your answer as a percent (do not type the % character - if your answer is 8.8% write 8.8 in the answer)
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Financial Management Principles And Practice
Authors: Timothy Gallagher
7th Edition
0996095462, 978-0996095464
