The market expects that inflation will be 3 each year for, Ask an Expert

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The market expects that inflation will be 3% each year for the next five years and then the following years will average 5% a year.

The maturity risk premium is estimated to be MRPt=0.1(t - 1)%. Maturity risk premium on a 2-year security is 0.1% or 0.001. Real risk-free rate of interest is 3 percent. Determine the yield on a Treasury bond that matures in twelve years?

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Category:- Basic Finance
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