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You observe the following rates: a one-year Treasury has a rate of 9.1%, a 2-year Treasury has a rate of 16.2%. You read in the

You observe the following rates: a one-year Treasury has a rate of 9.1%, a 2-year Treasury has a rate of 16.2%. You read in the Wall Street Journal that all investors agree that the one-year rate next year will be 17.7%.

Given this information, calculate the liquidity premium for year 2.

Enter your answer in decimals (not percent) and round to 4 decimal places, for example 0.1234.

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