One-year treasury bills currently earn 385 percent you, Ask an Expert

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One-year Treasury bills currently earn 3.85 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.05 percent. The liquidity premium on 2-year securities is 0.10 percent. If the liquidity theory is correct, what should the current rate be on 2-year Treasury securities? (Round your answer to 2 decimal places.)

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Financial Management, Finance

Category:- Financial Management
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