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Business, 29.10.2019 02:31 Basicwhitegirl1

Suppose the rate of return on a 10-year t-bond is 6.90%, the expected average rate of inflation over the next 10 years is 2.0%, the mrp on a 10-year t-bond is 0.9%, no mrp is required on a tips, and no liquidity premium is required on any treasury security. given this information, what should the yield be on a 10-year tips? disregard cross-product terms, i. e., if averaging is required, use the arithmetic average. a. 4.60% b. 4.00% c. 3.04% d. 4.76% e. 3.92%

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