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 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. 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 3.25%. Inflation is expected to be 1.75% this year and 5.00% 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. 7.5 What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. .06

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 19P

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The real risk-free rate is 2.25%. Inflation is expected to be 1.75% this year and 3.50% 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 of 3-year Treasury securities?
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