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Based on economists' forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1

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Based on economists' forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 El2r1) = El3r1) = El4r1) = 0.65% 1.80 1.924 2.29% L2 = 0.044 L3 = 0.089 L4 = 0,12 Using the liquidity premium theory, determine the current (long-term) rates. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Years Current (Long Term) Rates 0.65% 2 1.27 % 3 1.53 % 4 1.74 % 1

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