If inflation is anticipated to be 6 percent during the next year, while the real rate of interest for one-year loan is 5 percent, then what should the nominal rate of interest be for a risk-free one-year loan?  a. 11%  b. 6% c. 5% d. 12%

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.