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Suppose the interest rate on a 1-year T-bill is 0.25% and the FOMC states it intends to keep short term interest rates at the current
Suppose the interest rate on a 1-year T-bill is 0.25% and the FOMC states it intends to keep short term interest rates at the current level for the next 4 years. What is the current interest rate on a 3-year bonds if investors require a liquidity premium of 0.2%.
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