The real risk-free rate is 3.05%, inflation is expected to be 3.60% this year, and the maturity risk premium is zero. ignoring any cross-product terms, i. e., if averaging is required, use the arithmetic average, what is the equilibrium rate of return on a 1-year treasury bond?

Ans. The equilibrium rate of return on a 1-year Treasury bond is 6.65% (please check the explanation)

Explanation:

Hi, well, this type of bonds exist so people can avoid the time value of money risk, in other words, to keep money save from inflation and provide a risk free return at the same time. From a part of the text I can tell that the person who wrote it wanted to add up the risk free rate and the inflation rate, that is 3.05%+3.60% =6.65%.

This is why I wrote this answer, but the truth is that since they are both effective rates (risk free rate and inflation), they need to be add as effective rates, that is:

Therefore

So the real equilibrium rate of return is 6.76%, but for the sake of the question, I wrote 6.65%.

Best of luck.

explanation: i am going to tell you a lie dont know i just wanted to answer lol

the correct answer option is b. a single paragraph.

explanation:

when you are thinking about paragraph​ topics, you should always choose a subject that can be adequately addressed in a single paragraph.

a paragraph is a piece of writing consisting of a few sentences that deal with a single theme. it has only a single idea that the paragraph revolves around and talks about.

so a paragraph topic must be chosen wisely where a single idea can be communicated in a single paragraph.