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What is the most likely reason for the drop in the short - term interest rate from its level a month ago? Please explain. (

What is the most likely reason for the drop in the short

-

term interest

rate from its level a month ago? Please explain.

(

) (10

points

)

According to the liquidity premium theory, what can we infer about

investors

expectations for the trend of short

-

term market interest rates? Please

explain.

1

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