Questions 5&6

Questions out of 15 points Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: 1R1 = 5.8%, E(201)=6.4%, L2=0.1%. E(311)=6.9%, L3=0.2%, (4-1)-7.5%, 14-0.3% Using the liquidity premium hypothesis, calculate the current rate for the three-year Treasury security Selected Answer .6.2% O out of 15 points Question 6 Tom deposits $25,000 in a savings deposit paying 5%, compounded semiannually. What amount would he have at the end of eight years? Selected wwer A $37,246.92