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What would be the interest rate on a 6-year Treasury bond, given the following information? kpr=2% MR=0.1% for a 1-year loan, increasing by 0.1% each
What would be the interest rate on a 6-year Treasury bond, given the following information? kpr=2% MR=0.1% for a 1-year loan, increasing by 0.1% each additional year. LR=0.5%. DR= 0 for a 1-year loan, 0.1% for a 2-year loan, increasing by 0.1% for each additional year. Expected inflation rates: Year 1=3.0% Year 2=4.0% Year 3 and thereafter: 5.0% 8.5% 6.8% 8.1% 7.1%
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