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Consider the following zero - coupon bonds and their yields: Assume that the liquidity premium is 1 . 5 % per year. Using the liquidity

Consider the following zero

-

coupon bonds and their yields: Assume that the liquidity premium is

1.5 %

per year.

Using the liquidity preference hypothesis and the information above, calculate the expected interest rate for each future year. Please answer with the excel formula included.

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