Use the following information to answer the next questions.

Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 2.25%, and a maturity risk premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the number of years to maturity.

a) 3-year Treasury bond (as a percentage) b) 20-year Treasury bond (as a percentage) c) 1-year Treasury bond (as a percentage) d) 1-year Corporate bond (as a percentage)

The value of MRP needed, but not already provided is a) MRP = 4 x .10 (expressed in tenths of a percent) b) MRP = 3 x .10 (expressed in tenths of a percent) c) MRP = 2 x .10 (expressed in tenths of a percent) d) MRP = 1 x .10 (expressed in tenths of a percent)

The yield on a 10-year treasury bond would be calculated as rT-bond equals a) r* + IP + MRP b) r* + IP + MRP + LP + DRP c) r* + MRP + LP + DRP

(Enter the appropriate figures) Based on the calculation you selected above, the 1-year yield on a T-bond required is (Two decimals, %: 1.00 or 1.00%) ______________________________ % equals (Two decimals, %: 1.00 or 1.00%) ____________________________ % plus (Two decimals, %: 1.00 or 1.00%)_____________________ % plus (Two decimals, %: 1.00 or 1.00%)________________________%