About the expected interest rate

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Expected Interest Rate

The real risk-free rate is 2%. Inflation is expected to be 2% this year and 4.5% 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.

Reference no: EM131870959

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