Question
Liquidity Premium Hypothesis One-year Treasury bills currently earn 6.45 percent. You expect that one year from now, one-year Treasury bill rates will increase to 6.70
Liquidity Premium Hypothesis One-year Treasury bills currently earn 6.45 percent. You expect that one year from now, one-year Treasury bill rates will increase to 6.70 percent. The liquidity premium on two-year securities is .170 percent. If the liquidity theory is correct, what should the current rate be on two-year Treasury securities?
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Statistics Modeling And Finance
Authors: Mark A Munizzo, Lisa Virruso Musial
1st Edition
0840049234, 9780840049230
