The real risk-free rate of interest, k*, is 4 percent, and it is expected to remain constant over time. Inflation is expected to

be 2 percent per year for the next three years, after which time inflation is expected to remain at a constant rate of 5

percent per year. The maturity risk premium is 0% for securities with maturities of 1 year or less, 0.1% in year 2, and

increases by 0.1% per year thereafter.

What is the yield on a 7-year Treasury bond?