Suppose we observe the following rates: $1$R$1=12\%,1$R$2=15\%,$ and $(21)=14\%.$ If the

LPT holds, what is the liquidity premium for year $2?$

b$)(5$pt$)$ Suppose that the current one$$year rate is $3\%$ and expected one$$year interest rates in year $2$

is $7\%.$ According to UET, what is the current two$-$year interest rate?b$)(5$pt$)$ Suppose that the current one$-$year rate is $3\%$ and expected one$-$year interest rates in year $2$

is $7\%.$ According to UET, what is the current two$-$year interest rate?