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Social ScienceA 2-year Treasury security currently earns 1.77 percent. Over the next two years, the real risk-free rate is expected to be 1.30 percent per year and the inflation premium is expected to be 0.30 percent per year. Calculate the maturity risk premium on the 2-year Treasury security. (Round your answer to 2 decimal places.)
A 2-year Treasury security currently earns 1.77 percent. Over the next two years, the real risk-free rate is expected to be 1.30 percent per year and the inflation premium is expected to be 0.30 percent per year. Calculate the maturity risk premium on the 2-year Treasury security. (Round your answer to 2 decimal places.)
Expert Answer
Calculate the maturity risk...
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r,+IP+MRP 1.77%=1.30%+0.30%+ MRP MRP 1.77%-1.30%-0.30% 1.77%-1.60% 0.17%
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