Based on economists' forecasts and analysis, one$-$year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: Using the liquidity premium theory, what is the current rate on a fouryear Treasury security?

$R_1=6\mathrm{.}65\%$

$E(r_2)=7\mathrm{.}75\%L_2=0\mathrm{.}10\%$

$E(r_3)=7\mathrm{.}85\%L_3=0\mathrm{.}20\%$

$E(r_4)=8\mathrm{.}15\%L_4=0\mathrm{.}25\%$

Multiple Choice

$7736$ percent

$7\mathrm{.}600$ percent

$7738$ percent

$8\mathrm{.}400$ percent