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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
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 = 0.65 % E(2r1) = 1.80 % L2 = 0.04 % E(3r1) = 1.90 % L3 = 0.08 % E(4r1) = 2.20 % L4 = 0.10 % Using the liquidity premium theory, determine the current (long-term) rates. (Do not round intermediate calculations. Round your answers to 2 decimal places.) (Years 1,2,3,4).
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