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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: E(2r1)=E(3r1)=E(4r1)=R1=1.90%2.80%3.20%3.65%L2=L3=L4=0.07%0.09%0.14%
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: E(2r1)=E(3r1)=E(4r1)=R1=1.90%2.80%3.20%3.65%L2=L3=L4=0.07%0.09%0.14% Using the liquidity premium theory, determine the current (long-term) rates. Note: Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34)
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