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What is the nominal interest rate

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Problem - The real risk-free rate is 2%. Inflation is expected to be 3% this year, 4% next year, and then 3.5% thereafter. The maturity risk premium is estimated to be 0.0005 × (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security?

Reference no: EM132897584

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