Graduate2009
Dec 3, 2008, 03:45 PM
The risk free rate of interest is 3%. Inflation is expected to be 3% this year, 2% next year and 5%the following years. Assume the maturity risk premium is calculated to be .10x(t-1)%.
What is the yield on a 2 yr security?
A 4 year treasury?
10 year?
What is the yield on a 2 yr security?
A 4 year treasury?
10 year?