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Business, 10.10.2021 14:30 nikki225

Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: Using the liquidity premium theory, what is the current rate on a four-year Treasury security? R1 = 6.65%
E(r2) = 7.75% L2 = 0.10%
E(r3) = 7.85% L3 = 0.20%
E(r4) = 8.15% L4 = 0.25%

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