What should the current rate be on 2year treasury securities

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Reference no: EM13263759

One-year Treasury bills currently earn 4.05 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.25 percent. The liquidity premium on 2-year securities is 0.07 percent. If the liquidity theory is correct, what should the current rate be on 2-year Treasury securities?

Reference no: EM13263759

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