Liquidity Premium Hypothesis Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the r are expected to be as follows: R1 = 6.95% E(r2) = 8.05% L2 = .40% E(r3) = 8.15% L3 = .50% E(r4) = 8.45% L4 = .55% Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security? Multiple Choice O 9.0000% 7.9000% 8.2600% 7.8990%

Liquidity Premium Hypothesis Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the are expected to be as follows: R1=6.95%E(r2)=8.05%E(r3)=8.15%E(r4)=8.45%L2=.40%L3=.50%L4=.55% Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security? Multiple Choice 90000% 79000% 8.2600% 78990%