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7 Liquidity Premium Hypothesis One-year Treasury bits currently earn 5,80 percent. You expect that one year from now, one-year Treasury bill rates will increase to

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7 Liquidity Premium Hypothesis One-year Treasury bits currently earn 5,80 percent. You expect that one year from now, one-year Treasury bill rates will increase to 6.05 percent. The liquidity premium on two-year securities is 105 percent. If the liquidity theory is correct, what should the current rate be on two-year Treasury securities? Sood Multiple Choice References 5.9770% 5.9250X 1195505 3.98507

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