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Yield Curves Suppose the inflation rate is expected to be 6% next year, 4.9% the following year, and 3.5% thereafter. Assume that the real risk-free
Yield Curves Suppose the inflation rate is expected to be 6% next year, 4.9% the following year, and 3.5% thereafter. Assume that the real risk-free rate, r*, will remain at 1. premiums on Treasury securities rise from zero on very short-term bonds (those that mature in a few days) to 0.2% for 1-year securities. Furthermore, maturity for each year to maturity, up to a limit of 1.0% on 5-year or longer-term T-bonds. a. Calculate the interest rate on 1-year Treasury securities. Round your answer to two decimal places. Calculate the interest rate on 2-year Treasury securities. Round your answer to two decimal places Calculate the interest rate on 3-year Treasury securities. Round your answer to two decimal places. Calculate the interest rate on 4-year Treasury securities. Round your answer to two decimal places. Calculate the interest rate on 5-year Treasury securities. Round your answer to two decimal places. Calculate the interest rate on 10-year Treasury securities. Round your answer to two decimal places
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