The rate of inflation for the next 12 months

Reference no: EM13308734

The rate of inflation for the next 12 months (t=1) is expected to be 1.4 percent; it is expected to be 1.8 percent the following year (t=2); and 2.0 percent the following year (t=3).Assume that the real risk-free rate is 3 percent for all maturities.What is the yield to maturity on risk-free bonds be in one year, five years, and 10 years.

Reference no: EM13308734

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