The real risk-free rate is 35 inflation is expected to be, Ask an Expert

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The real risk-free rate is 3.5%. Inflation is expected to be 2.25% this year and 4% during the next 2 years. Assume that the maturity risk premium is zero.

a. What is the yield on 2-year Treasury securities? Round your answer to two decimal places.

b. What is the yield on 3-year Treasury securities? Round your answer to two decimal places.

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