(Answered) Problem assume that the current yield on a one-year

Economics

Problem: Assume that the current yield on a one-year security is 6.0 percent and that the yield on a two-year security is 7.2 percent. For this question, assume that there is a liquidity premium on a two-year security of 0.4 percent. Accounting for the liquidity premium, determine the one-year forward rate (or the one-year rate one year from now).

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