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The real risk free rate of interest in 2 percent inflation

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The real risk free rate of interest in 2 percent. Inflation is expected to be 2 percent this coming year, jump to 3 percent next year and increase to 4 percent the year after(year 3). According to the expectations theory, what should be the interest rate on 3-year, risk free securities?

Reference no: EM13569237

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