What is the expected rate of inflation in the second year

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Question: If Danny buys a 1-year T-bill with a yield of 3% that reflects an Inflation Premium of 1%, and Karen buys a 2-year T-note yielding 4% each year, what is the expected rate of inflation in the second year of Karen's note (assuming the real rate of interest holds constant over the two years)?

Reference no: EM131965307

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