A 2-year treasury security currently earns 525 percent over, Financial Management

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A 2-year treasury security currently earns 525 percent over

A 2-year Treasury security currently earns 5.25 percent. Over the next two years, the real interest rate is expected to be 3.00 percent per year and the inflation premium is expected to be 2.00 percent per year. What is the maturity risk premium on the 2-year Treasury security?

a. 0.25%

b. 1.00%

c. 1.05%

d. 5.00%

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Financial Management: A 2-year treasury security currently earns 525 percent over

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Financial Management: A 2-year treasury security currently earns 525 percent over

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