The real risk-free rate is 2.65%. Inflation is expected to be 3.65% this year, 4.65% next...

The real risk-free rate is 2.65%. Inflation is expected to be 3.65% this year, 4.65% next year, and 2.4% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity.

What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

Expert Solution

Inflation premium = (3.65% + 4.65% + (5 * 2.4%))/7 = 2.90%

Maturity risk premium = 0.05 * (7 - 1)% = 0.30%

Nominal yield = 2.65% + 0.30% + 2.90% = 5.85%

jeff jeffy answered 2 years ago

The real risk-free rate is 2.65%. Inflation is expected to be 3.65% this year, 4.85% next...

The real risk-free rate is 2.65%. Inflation is expected to be 3.65% this year, 4.85% next year, and 2.1% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places

The real risk-free rate is 1.95%. Inflation is expected to be2.95% this year, 4.65% next...

The real risk-free rate is 1.95%. Inflation is expected to be 2.95% this year, 4.65% next year, and 2.3% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

The real risk-free rate is 1.75%. Inflation is expected to be 2.75% this year, 4.65% next...

The real risk-free rate is 1.75%. Inflation is expected to be 2.75% this year, 4.65% next year, and 2.6% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

The real risk-free rate is 3.3%. Inflation is expected to be 2.3% this year, 3.85% next...

The real risk-free rate is 3.3%. Inflation is expected to be 2.3% this year, 3.85% next year, and 2.05% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places . %

The real risk-free rate is 2.45%. Inflation is expected to be 3.45% this year, 4.85% next...

The real risk-free rate is 2.45%. Inflation is expected to be 3.45% this year, 4.85% next year, and 2.7% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

The real risk-free rate is 2.55%. Inflation is expected to be 3.55% this year, 4.45% next...

The real risk-free rate is 2.55%. Inflation is expected to be 3.55% this year, 4.45% next year, and 2.6% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places. %

The real risk-free rate is 1.75%. Inflation is expected to be2.75% this year, 4.45% next...

The real risk-free rate is 1.75%. Inflation is expected to be 2.75% this year, 4.45% next year, and 2.1% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

The real risk-free rate is 1.95%. Inflation is expected to be2.95% this year, 4.85% next...

The real risk-free rate is 1.95%. Inflation is expected to be 2.95% this year, 4.85% next year, and 2.3% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

The real risk-free rate is 2.45%. Inflation is expected to be 3.45% this year, 5.15% next...

The real risk-free rate is 2.45%. Inflation is expected to be 3.45% this year, 5.15% next year, and 2.5% thereafter. The maturity risk premium is estimated to be 0.05 × (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

The real risk-free rate is 3%, and inflation is expected to be 2% for the next...

The real risk-free rate is 3%, and inflation is expected to be 2% for the next 2 years. A 2-year Treasury security yields 6.1%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place. %

Question