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Liquidity Premium Hypothesis One-year Treasury bills currently earn 5.10 percent. You expect that one year from now, one-year Treasury bill rates will increase to 5.25

Liquidity Premium Hypothesis One-year Treasury bills currently earn 5.10 percent. You expect that one year from now, one-year Treasury bill rates will increase to 5.25 percent. The liquidity premium on two-year securities is .145 percent. If the liquidity theory is correct, what should the current rate be on two-year Treasury securities?

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