What is maturity risk premium for the two-year security

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Maturity Risk Premium

The real risk-free rate is 2.5%, and inflation is expected to be 3.25% for the next 2 years. A 2-year Treasury security yields 8.5%. What is the maturity risk premium for the 2-year security? Round your answer to two decimal places. %

Reference no: EM131316596

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