Determinants of interest rate for individual securities

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1. Determinants of Interest Rate for Individual Securities A 2-year Treasury security currently earns 6.75 percent. Over the next two years, the real interest rate is expected to be 3.18 percent per year and the inflation premium is expected to be 2.18 percent per year. What is the maturity risk premium on the 2-year Treasury security?

1.39%

1.35%

1.00%

5.36%

2. Future Value of an Annuity What is the future value of a $570 annuity payment over 7 years if the interest rates are 6 percent?

$4,784.49

$4,077.38

$857.07

$4,229.40

Reference no: EM132010315

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