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Suppose we observe the following rates; 1 1 = 0 . 7 0 % 2 = 1 4 5 % , and ( : 2
Suppose we observe the following rates; and : If the liquidity premium theory of the term structure of interest rates holds, what is the lquidity premium for year Do not round intermedlate calculations. Rochid you answer to decimal places:
Liquidity premum
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