If inflation is expected to average 15 points over both


A 30 year US Treasury bond has a 4.0 % interest rate. In contrast, a 10-year Treasury bond has an interest rate of 3.7 %. If inflation is expected to average 1.5 % points over both the next ten yrs and thirty years, determine the maturity risk premium for the thirty-yr bond over the 10-year bond.

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Finance Basics: If inflation is expected to average 15 points over both
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