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Suppose we observe the following rates: ? 1 R 1 = 1 0 % , ? 1 R 2 = 1 4 % , and

Suppose we observe the following rates: ?1R1=10%,?1R2=14%, and E(2r1)=18%. If the liquidity premium theory of the term
structure of interest rates holds, what is the liquidity premium for year 2?
Note: Round your intermediate calculations to 5 decimal places and final percentage answer to 3 decimal places (e.g.,32.161).
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