Assume that the liquidity premium theory is established, and under the assumption below, the claim is made.

Calculate the liquidity premium and draw a field curve.

Year/Expiration. 1 2 3 4 5 1 year interest rate (predicted current and future interest rates) 2% 5% 7% 8% 10% Interest rates on maturing bonds. 2% 4% 5% 7% 10%