The real risk-free rate is 2.50%. Inflation is expected to be 2.00% this year and 4.75% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The real risk-free rate is 2.50%. Inflation is expected to be 2.00% this year and 4,75% during the next 2 years. Assume that the maturity risk premium is zero.
What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.
%
What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.
%
Transcribed Image Text:The real risk-free rate is 2.50%. Inflation is expected to be 2.00% this year and 4,75% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %
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