Problem:
The real risk-free rate is 2.25%. Inflation is expected to be 2.35% this year, 4% next year, and then 2.75% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity.
Required:
Question: What is the yield on a 7-year Treasury note?
Note: Explain all steps comprehensively.