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Suppose we observe the following rates: ? 1 R 1 = 1 3 . 0 % , ? 1 R 2 = 1 6 .

Suppose we observe the following rates: ?1R1=13.0%,?1R2=16.0%, and E(2r1)=19.0%. 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 2 decimal places (e.g.,32.16).
Liquidity premium for year 2
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