What is the maturity premium for this 2-year treasury note


Currently the real risk-free rate of interest is 1.5% and inflation is expected to be 3.00% for the next two years. If a 2-year Treasury note yields 7.25%, what is the maturity premium for this 2-year Treasury note? (Hint: Assume that the government will not default and Treasury notes can be converted to cash immediately)

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: What is the maturity premium for this 2-year treasury note
Reference No:- TGS0612840

Expected delivery within 24 Hours