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QUESTION
If the 10-year Treasury bond rate is 4.9%, the inflation premium is 2.1%, and the maturity-risk premium on 10-year Treasury bonds is 0.
If the 10-year Treasury bond rate is 4.9%, the inflation
premium is 2.1%, and the maturity-risk premium on 10-year Treasury bonds is
0.3%, assuming that there is no liquidity-risk premium on these bonds, what is the
real risk-free interest rate?
