Suppose the real risk-free rate is 3.00%, the average future inflation rate is 2.25%, and...
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Suppose the real risk-free rate is 3.00%, the average future inflation rate is 2.25%, and a maturity premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t-1), where t is the years to maturity. What rate of return would you expect to earn on a 10-year Treasury security?
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