Assume that current one$-$year Treasury yields $r1$;$t=4\%$ and current two$-$year yields

$r2$;$t=7\%.$ What liquidity premium for a two$-$year bond would make expected one year

yields $re$

$1$;$t+1$ equal $to$ current one$-$year yields: $(a)300$ basis points; $(b)0$:$30\%$; $(c)1$:$5\%$; $(d)$

$3$:$00\%$;