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Finance

Problem:

The real risk-free rate is 3.5%. Inflation is expected to be 1.75% this year and 4.75% during the next 2 years. Assume that the maturity risk premium is zero.

Required:

Question 1: What is the yield on 2-year Treasury securities?

Question 2: What is the yield on 3-year Treasury securities?

Note: Explain all steps comprehensively.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91175309

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