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Posted by: Homeworkhelp
Price Quoted by Student: $3
Posted On: 2011-02-14 12:12:40
 
Question

Determinant of Interest Rates Problem. The real risk-free rate of interest is 4%. Inflation is expected to be 2% this year and 4% during the next two years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury securities?


Solutions
Yield on 2-year Treasury securities:   Aver
Price $3
Attachment 1: The real risk-free rate of interest is 4%.doc
Solution Posted By: Homeworkhelp    Posted on: 14-02-2011