One-year treasury bills currently earn 410 you expect that, Ask an Expert

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One-year Treasury bills currently earn 4.10%. You expect that one year from now, 1-year Treasury bill rates will increase to 4.85% and that two years from now, 1-year Treasury bill rates will increase to 5.65%. The liquidity premium on 2-year securities is .55% and on 3-year securities is .75%. If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92396144

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