Expected interest rate, The real risk-free rate is 2.25%.

Expected interest rate

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Reference no: EM13768110

Expected Interest Rate

The real risk-free rate is 2.25%. Inflation is expected to be 2.35% this year, 4% next year, and then 2.75% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Round your answer to two decimal places.

Reference no: EM13768110

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