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Consider the following short-term rates and a liquidity premium: Required: First calculate spot rates if they are solehy a function of Expectation Theory. Next, if

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Consider the following short-term rates and a liquidity premium: Required: First calculate spot rates if they are solehy a function of Expectation Theory. Next, if the liquidity rate is a constant 2.00 percent for rears 2 and 3 , calculate the forward rates. Finally calculate the spot rates combining both the fxpectations Theory with the liquidity premium

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