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2. Consider the following (zero-coupon) yield curve and liquidity premiums Term 1 year 2 year 3 year 4 year YieldLiquidity premium 1.50% 1.75% 2.25% 2.50%

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2. Consider the following (zero-coupon) yield curve and liquidity premiums Term 1 year 2 year 3 year 4 year YieldLiquidity premium 1.50% 1.75% 2.25% 2.50% 0.10% 0.15% 0.30% What would be E(2R), E(3R1) and E(4R1) under the liquidity premium hypothesis

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