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Question 28 (2 points) You check the spot curve and find that the 1-year spot rate is 6.30%, the 2-year spot rate is 7.11%, the
Question 28 (2 points) You check the spot curve and find that the 1-year spot rate is 6.30%, the 2-year spot rate is 7.11%, the 3-year spot rate is 7.32%, the 4-year spot rate is 8.37%, and the 5-year spot rate is 8.56%. You believe in the liquidity preference theory and assume that there is a constant liquidity premium of 1.00%. What is the 2-year short rate? Your answer should be in percentage points to 2 decimal places (ex: 2.50). Your
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