Liquidity Premium Hypothesis 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:

$R_1=7\mathrm{.}50\%$

$E(r_2)=8\mathrm{.}60\%L_2=\mathrm{.}95\%$

$E(r_3)=8\mathrm{.}70\%L_3=1\mathrm{.}05\%$

$E(r_4)=9\mathrm{.}00\%L_4=1\mathrm{.}10\%$

Using the liquidity premium hypothesis, what is the current rate on a four$-$year Treasury security?

Multiple Choice

$8\mathrm{.}4490\%$

$9\mathrm{.}2200\%$

$10\mathrm{.}1000\%$

$8\mathrm{.}4500\%$