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Inflation is expected to be 2.90% this year, 4.45% next year, and 2.00% thereafter. The maturity...

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Finance

Inflation is expected to be 2.90% this year, 4.45% next year,and 2.00% thereafter. The maturity risk premium is estimated to be0.08 x (t - 1)%, where t = number of years to maturity. What is theyield on a 7-year Treasury note? Assume a real risk-free rate of2.40%.

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Inflation is expected to be 2.90% this year, 4.45% next year,and 2.00% thereafter. The maturity risk premium is estimated to be0.08 x (t - 1)%, where t = number of years to maturity. What is theyield on a 7-year Treasury note? Assume a real risk-free rate of2.40%.

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