The Wall Street Journal reports that the rate on three-year Treasury securities is 5.25 percent and the rate on four-year Treasury securities is 5.50 percent. The one-year interest rate expected in three years, E(4r1), is 6.10 percent. According to the liquidity premium theory, what is the liquidity premium on the four-year Treasury security, L4? (LG 2-7)

AppendixLO1