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Suppose we observe the following rates: 1 R 1 = 0 . 9 0 % , 1 R 2 = 1 . 3 5 %
Suppose we observe the following rates: RR and Er If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year L
Note: Do not round intermediate calculations. Round your percentage answer to decimal places ie should be entered as
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