What is the maturity risk premium for the two-year security

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Reference no: EM132046255

1. You have found the following interest rates for zero coupon bonds: Maturity EAR 3 month 4.17% 6 month 4.69% 9 month 4.98% 1 year 5.35% What are the three month forward rates in three months, six months, and nine months when expressed as EARs?

2. The real risk-free rate is 3.25%, and inflation is expected to be 2.5% for the next 2 years. A 2-year Treasury security yields 8.75%. What is the maturity risk premium for the 2-year security? Round your answer to two decimal places.

Reference no: EM132046255

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