Maturity Risk Assignment | Professional Writing
May 25th, 2020
Suppose the real risk-free rate is 4.20%, the average expected future inflation rate is 2.70%, and a maturity risk premium of 0.10% per year to maturity applies, i.e.,
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Maturity Risk Assignment | Professional Writing
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MRP = 0.10%(t), where t is the number of years to maturity. What rate of return would you expect on a 5-year Treasury security?
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