Determinant of interest rates

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Determinant of Interest Rates

The real risk-free rate of interest is 3%. Inflation is expected to be 2% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Round your answer to two decimal places.

What is the yield on 3-year Treasury securities? Round your answer to two decimal places.

Reference no: EM131117458

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