assume that the real risk-free rate is 4 percent and the maturity risk premium is zero. If the nominal rate…

assume that the real risk-free rate is 4 percent and the maturity risk premium is zero. If the nominal rate of interest on one-year bonds is 11 percent, and on comparable-risk two -year bonds it is 13 percent, what is the one – year inteest rate that is expected for year 2? what inflation rate is expected during year 2?

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