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April 19, 2014

Homework Help: Managerial Finance

Posted by SLW on Friday, September 23, 2011 at 8:55pm.

The real risk-free rate is 2.1%. Inflation is expected to be 2.2% this year, 3.95% next year, and then 3.05% 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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