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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: Ri
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: Ri E(2r1) - E(3ri) - E(401) - 1.50% 2.40% 2.80% 3.25% L2 0.06% L3 0.08% L4 = 0.13% Using the liquidity premium theory, determine the current (long-term) rates. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years 1 Current (Long- Term) Rates :% % % 2 3 4 %
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