The expected annual inflation rates for the coming 5 years, Ask an Expert

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The expected annual inflation rates for the coming 5 years are listed in the following table Year Expected annual inflation 1 4% 2 4% 3 3% 4 4% 5 5% The real risk free rate for a five year debt security is 2% The current yield for a 5 year Treasury note is 10%. Assume that the liquidity premium for the security is 0%. What is the maturity risk premium of the security?

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Financial Management, Finance

Category:- Financial Management
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