Question
One-year Treasury bills currently earn 3.70 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.90 percent. The liquidity
| One-year Treasury bills currently earn 3.70 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.90 percent. The liquidity premium on 2-year securities is 0.07 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 | % |
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The Evolution Of Finance
Authors: Barbara Guth
1st Edition
1633377261, 978-1633377264
