Review problem related to treasury securities

Reference no: EM132069782

Question: The real risk-free rate is 3%. Inflation is expected to be 2% this year and 4% during the next 2 years. Assume that the maturity risk premium is zero.

a) What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.

b) What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132069782

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