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Using a financial calculator please... The real risk-free rate of interest is 1 percent. Inflation is expected to be 5 percent this coming year, jump

Using a financial calculator please...image text in transcribed

The real risk-free rate of interest is 1 percent. Inflation is expected to be 5 percent this coming year, jump to 6 percent next year, and increase to 7 percent the year after (Year 3). According to the expectations theory, what should be the interest rate on 3-year, risk-free securities today? 6.00%5.00%5.50%6.50%7.00% The real risk-free rate of interest is 1 percent. Inflation is expected to be 5 percent this coming year, jump to 6 percent next year, and increase to 7 percent the year after (Year 3). According to the expectations theory, what should be the interest rate on 3-year, risk-free securities today? 6.00%5.00%5.50%6.50%7.00%

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