Business, 07.01.2020 02:31 isabellamason1499

Assume that the real risk-free rate is 1% and that the maturity risk premium is zero. if a 1-year treasury bond yield is 7% and a 2-year treasury bond yields 8%, what is the 1-year interest rate that is expected for year 2? calculate this yield using a geometric average. do not round intermediate calculations. round your answer to two decimal places. % what inflation rate is expected during year 2? do not round intermediate calculations. round your answer to two decimal places. % comment on why the average interest rate during the 2-year period differs from the 1-year interest rate expected for year 2.

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Assume that the real risk-free rate is 1% and that the maturity risk premium is zero. if a 1-year tr...

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