Explore BrainMass

Explore BrainMass

    Maturity Risk Premium: 2 Year Security

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The real risk free rate is 3%, and inflation is expected to be 3% for the next 2 years. A 2-year Treasury security yields 6.2%. How would I go about calculating the maturity risk premium for this 2-year security?

    © BrainMass Inc. brainmass.com March 4, 2021, 7:38 pm ad1c9bdddf
    https://brainmass.com/business/finance/maturity-risk-premium-inflation-treasury-security-113165

    Solution Preview

    The real risk free rate is 3%, and inflation is expected to be 3% for the next 2 years. A 2-year Treasury security yields 6.2%. How would I go about calculating the maturity risk premium for this ...

    Solution Summary

    The solution calculates the Maturity Risk Premium for a 2-year Treasury security.

    $2.49

    ADVERTISEMENT