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The real risk-free rate of interest is 4%. Inflation is expected to be 2% this year and 4% during each of the next 2 years.
The real risk-free rate of interest is 4%. Inflation is expected to be 2% this year and 4% during each of the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year treasury securities? What is the yield on 3-year treasury securities?
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