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You have liquidity premium 0 . 4 0 % for the next two years and 0 . 5 0 % thereafter. What would be the

You have liquidity premium 0.40% for the next two years and 0.50% thereafter. What would be the yield to maturity for a 5-year bond if the expectations and liquidity premium theories hold? You would ____ a 5-year T-bond at a 2.75% interest rate.
2.50%; buy
2.50%; not buy
2.70%; buy
2.70%; not buy
3.50%; not buy

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