Maturity risk premium on the two-year treasury security

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Reference no: EM132019496

What annual rate of return is earned on a $1,000 investment when it grows to $2,000 in six years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

A 2-year Treasury security currently earns 1.75 percent. Over the next two years, the real risk-free rate is expected to be 1.00 percent per year and the inflation premium is expected to be 0.35 percent per year. Calculate the maturity risk premium on the 2-year Treasury security

(Round your answer to 2 decimal places.)

Reference no: EM132019496

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