The real risk-free rate is 2.75%. Inflation is expected to be 1.75% this year and 4.75% during the next 2 years. Assume that the maturity ris premium is zero. What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. 6.50 What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. 3.750 % %
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- The real risk-free rate is 2.50%. Inflation is expected to be 1.75% this year and 3.75% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.Assume that the real risk-free rate is 1% and that the maturity risk premium is zero. If a 1-year Treasury bond yield is 6% and a 2-year Treasury bond yields 7%, what is the 1-year interest rate that is expected for Year 2? Calculate this yield using a geometric average. Do not round intermediate calculations. Round your answer to two decimal places. What inflation rate is expected during Year 2? Do not round intermediate calculations. Round your answer to two decimal places.Assume that the real risk-free rate is 1.9% and that the maturity risk premium is zero. If a 1-year Treasury bond yield is 5.6% and a 2-year Treasury bond yields 6.3%. Calculate the yield using a geometric average. What is the 1-year interest rate that is expected for Year 2? Do not round intermediate calculations. Round your answer to two decimal places. % What inflation rate is expected during Year 2? Do not round intermediate calculations. Round your answer to two decimal places. % Comment on why the average interest rate during the 2-year period differs from the 1-year interest rate expected for Year 2. The difference is due to the fact that the maturity risk premium is zero. The difference is due to the fact that we are dealing with very short-term bonds. For longer term bonds, you would not expect an interest rate differential. The difference is due to the fact that there is no liquidity risk premium. The difference is due to the inflation rate reflected in the two interest…
- The real risk-free rate is 4.19%. Inflation is expected to be 2.1% this year and 4.75% during the next 4 years. Assume that the maturity risk premium is zero. What is the yield on 4-year treasury securities? State your answer as a percentage to 2 decimal places. Do not include the % symbol.Assume that the real risk-free rate is 2.4% and that the maturity risk premium is zero. If a 1-year Treasury bond yield is 5.6% and a 2-year Treasury bond yields 6.3%. Calculate the yield using a geometric average. What is the 1-year interest rate that is expected for Year 2? Do not round intermediate calculations. Round your answer to two decimal places. % What inflation rate is expected during Year 2? Do not round intermediate calculations. Round your answer to two decimal places. % Comment on why the average interest rate during the 2-year period differs from the 1-year interest rate expected for Year 2. The difference is due to the inflation rate reflected in the two interest rates. The inflation rate reflected in the interest rate on any security is the average rate of inflation expected over the security's life. The difference is due to the real risk-free rate reflected in the two interest rates. The real risk-free rate reflected in the interest rate on any security is the…The real risk-free rate is 3.25%. Inflation is expected to be 1.75% this year and 5.00% during the next 2 years. Assume that the maturity nsk premium is zero. What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. 7.5 % What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. ,06 %
- The real risk-free rate is 2.25%. Inflation is expected to be 2.5% this year and 4.25% during the next 2 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?The real risk-free rate is 2 percent, and inflation is expected to be 3 percent next year and 6 percent for the following 3 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? a. 8.00% b. 6.50% c. 2.00% d. 5.00% e. 11.00%Interest rates on 4-year Treasury securities are currently 6.9%, while 6-year Treasury securities yield 7.55%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round intermediate calculations. Round your answer to two decimal places.
- The real risk-free rate is 3%. Inflation is expected to be 2% this year and 4% during the next 2 years. Assume that the maturity risk premium risk is zero. What is the yield on 2-year Treasury securities? What is the yield on 3-year Treasury securities?The real risk-free rate is 1.95%. Inflation is expected to be 2.95% this year, 4.25% next year, and 2.1% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.The real risk-free rate is 3.55%, inflation is expected to be 3.60% this year, and the maturity risk premium is zero. Taking account of the cross-product term, i.e., not ignoring it, what is the equilibrium rate of return on a 1-year Treasury bond? (Round your final answer to 3 decimal places.)