The equilibrium rate of return on a 1-year Treasury bond is 10.24%.
Using this formula
T-bond yield = [(1 + Real Risk-free Rate) × (1 + Inflation Rate)] - 1
Let plug in the formula
T-bond yield= [(1 + 0.04) × (1 + 0.06)] - 1
T-bond yield=[(1.04)×(1.06)] -1
T-bond yield= 1.1024 - 1
T-bond yield= 0.1024×100
T-bond yield=10.24%
Inconclusion the equilibrium rate of return on a 1-year Treasury bond is 10.24%.
Learn more here:
https://brainly.com/question/13576234
