What is the current rate on a four-year Treasury security

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Question - Liquidity Premium Hypothesis Based on economists forecasts and analysis, one year Treasury bill rates and liquidity premiums for the next four years are expected to be as follow: R1=7.35% E(r2)= 8.45% E(r3)= 8.55% E(r4)=8.855% L2=.80% L3=.90% L4=.95%. Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security?

Reference no: EM132926173

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