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Liquidity Premium Hypothesis One-year Treasury bills currently earn 6.10 percent. You expect that one year from, now one-year Treasury bill rates will increase to 6.35

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Liquidity Premium Hypothesis One-year Treasury bills currently earn 6.10 percent. You expect that one year from, now one-year Treasury bill rates will increase to 6.35 percent. The liquidity premium on two-year securities is 135 percent. If the liquidity theory is correct, what should the current rate be on two year Treasury securities? 6.2250% 4.1950% 6.2920% 12.5850%

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