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19. The 1-year interest rates from years one to six years are 3%, 4%, 4%, 5%, 6%, 6% respectively. In addition, the following liquidity premiums
19. The 1-year interest rates from years one to six years are 3%, 4%, 4%, 5%, 6%, 6% respectively. In addition, the following liquidity premiums from years one to six are expected to be 0%; 0.25%, 0.5%, 0.75%, 1%, and 1.25% respectively. Assuming that the liquidity premium theory takes place, the eld to maturity of a 4 years bond is: * O a. 3.67% b. 4% O C.4.67% O d. 4.75% e. None of the above
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