Question
39. Fill in the following chart. For the liquidity premium, assume that after the first year you require an additional half a percent return for
39. Fill in the following chart. For the liquidity premium, assume that after the first year you require an additional half a percent return for each year.
| Year | 1 | 2 | 3 | 4 | 5 |
|
| 1 Yr interest | 2% | 3% | 1% | 4% | 5% | |
| Interest for an N yr bond | 2% |
|
|
|
| Expectations Theory |
| Interest for an N yr bond | 2% |
|
|
|
| Liquidity Premium |
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Beer Business Finance
Authors: Kary R Shumway
1st Edition
1090833741, 978-1090833747
