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a. Assume that that the liquidity premium theory is the dominant theory in Term structure of interest rates; also, assume that the yield curve looks

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a. Assume that that the liquidity premium theory is the dominant theory in Term structure of interest rates; also, assume that the yield curve looks like the one shown in the figure below; What is the market predicting about the movement of future short-term interest rates

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\fYield to Maturity Term to Maturity

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