Problem 6-12 Liquidity Premium Theory (LG6-5) Based on economists forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: aseounesnom eso eote aet h and novsi -year Treasurybill tdes and ludiypre for the R1= Eon)= Eon)= E(ar)= 1.85% 2.75% 3.15% 3.60% L2 = 0.06% L3 = 0.08% L4 = 0.13% Using the liquidity premium theory, plot the current yield curve. Make sure you label the axes on the graph and identify the four annual rates on the curve both on the axes and on the yield curve itself. (D not round intermediate calculations. Round your answers to 2 dectmal places) Year Current (Long-term) Rates