What is nominal interest rate on a 7-year treasury security

Reference no: EM13302542

The real risk-free rate is 2%. Inflation is expected to be 3% this year, 4% next year and then 3.5% thereafter. The maturity risk premium is estimated to be 0.0005 x (t-1), where t = number of years to maturity. What is the nominal interest rate on a 7 year Treasury security?

Reference no: EM13302542

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