Monday, February 26, 2007
The maturity risk premium is estimated to be 0.05 X (t-1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? 2. Due to a recession, expected inflation this year is only 3 percent. However, the inflation rate in year 2 and thereafter is expected to be constant at some level above 3 percent. ................
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