One year treasury bills currently earn 535 percent you, Ask an Expert

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One year treasury bills currently earn 5.35 percent. You expect that one year from now, one year treasury bill rates will increase to 5.50 percent. The liquidity premium on two-year securities is 170 percent. If the liquidity theory is correct, what should the current rate be on two-year treasury securities?

A) 11.0200%

B) 5.5100%

C) 5.4250%

D) 3.6730%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91671015

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