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c) Discuss how the liquidity premium theory of the term structure of interest rates differ from the unbiased expectations theory? Under normal economic environment, that

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c) Discuss how the liquidity premium theory of the term structure of interest rates differ from the unbiased expectations theory? Under normal economic environment, that is, an upward-sloping yield curve, explain the relationship of liquidity premiums for successive years into the future? Why? (7 marks)

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