The real risk-free rate is 305 inflation is expected to be


The real risk-free rate is 3.05%. Inflation is expected to be 2.6% this year, 3.85% next year, and then 3.2% 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? Round your answer to two decimal places.

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Financial Management: The real risk-free rate is 305 inflation is expected to be
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