CFIN
5th Edition
ISBN: 9781305661639
Author: Scott Besley, Eugene Brigham
Publisher: Cengage Learning
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Chapter 5, Problem 7PROB
Summary Introduction
Expected real interest rate is the interest rate of an investors receives or expects to receive after allowing inflation.
Yield on two-year treasury bond is 5% and one year is 4%. The maturity risk premium is zero.
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