One-year Treasury bills currently earn 3.55 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.75 percent. The liquidity premium on 2-year securities is 0.04 percent. If the liquidity theory is correct, what should the current rate be on 2-year Treasury securities? (Round your answer to 2 decimal places.)

Current rate

%

One-year Treasury bills currently earn 2.70 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 2.90 percent and that two years from now, 1-year Treasury bill rates will increase to 3.40 percent. The liquidity premium on 2-year securities is 0.15 percent and on 3-year securities is 0.25 percent. If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Current rate

%

Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:

₁R₁ = 8%, E(₂r₁) = 9%, E(₃r₁) = 9.6%, E(₄r₁) = 9.95%

Using the unbiased expectations theory, calculate the current (long-term) rates for 1-, 2-, 3-, and 4-year-maturity Treasury securities. (Round your answers to 2 decimal places.)

Year	Current (Long-term) Rates
1		%
2		%
3		%
4		%