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I need help with number 1 and 2 are required to provide full explanations at least five sentences even if the answer ls true (10
I need help with number 1 and 2
are required to provide full explanations at least five sentences even if the answer ls true (10 points) Assame that as of today, the annualized interest rate on a four-year security is 3.5%. while the annualized interest rate on a three-year security is 25%. Based on the pure expectations, what is estimate of the one-year forward rate three years from now? ji -. Assume that as of today, the annualized two-year interest is 55% the one-year interest rate is 3.2% and the liquidity premium of a two-year security is 0.25%. Based on the Liquidity premium theory, what is the estimate of the one-year forward rate one-year from now? (10 points)Step by Step Solution
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