Question
One-year Treasury bills currently earn 3.90 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.10 percent. The liquidity
One-year Treasury bills currently earn 3.90 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.10 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.) Show work please.
Current rate %
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Restaurant Financial Management
Authors: Hyung-il Jung
1st Edition
1774631431, 978-1774631430
