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What should the yield to maturity on risk-free bonds

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The rate of inflation in year 1 is expected to be 1.4%, year two is 1.8%, and years three through five is expected to be 2%. Assume the real risk-free rate, r*, is 3% for all maturities. What should the yield to maturity on risk-free bonds that mature in (a) one year, (b) 2 years, (c) 5 years?

Reference no: EM132124433

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