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:

R1 = 6.05%
E(r2) = 7.15%	L2 = .85%
E(r3) = 7.35%	L3 = .88%
E(r4) = 7.55%	L4 = .90%

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

8.4500%

7.0250%

7.6782%

7.5500%