The real risk-free rate is 3.0% and inflation is expected to be 2.25% for the next...

The real risk-free rate is 3.0% and inflation is expected to be 2.25% for the next 2 years. A 2-year Treasury security yields 6.25%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

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Expert Solution

MRP = MATURITY RISK PREMIUM = 1.0% (ROUNDED TO 1 DECIMAL)

jeff jeffy answered 2 hours ago

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