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What is the liquidity premium on the four-year treasury

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The Wall Street Journal reports that the rate on three-year Treasury securities is 5.25 percent and the rate on four-year Treasury securities is 5.50 percent. The one-year interest rate expected in three years is E (3r1), 6.10 percent. According to the liquidity premium hypothesis, what is the liquidity premium on the four-year Treasury security, L 4?

Reference no: EM13317519

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