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Business, 06.11.2019 03:31 ChanceJ

Suppose the rate of return on a 10-year t-bond is 6.90%, the expected average rate of inflation over the next 10 years is 2.0%, the mrp on a 10-year t-bond is 0.9%, no mrp is required on a tips, and no liquidity premium is required on any treasury security. given this information, what should the yield be on a 10-year tips? disregard cross-product terms, i. e., if averaging is required, use the arithmetic average.

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