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YTM 1 year YTM 2 year YTM 3 year YTM 4 year YTM 5 year YTM 6 year YTM 7 year YTM 8 year YTM

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YTM 1 year YTM 2 year YTM 3 year YTM 4 year YTM 5 year YTM 6 year YTM 7 year YTM 8 year YTM 9 year YTM 10 year LP 1 year LP 2 year LP 3 year LP 4 year LP 5 year LP 6 year LP 7 year LP 8 year LP 9 year LP 10 year
2.25% 2.50% 3.00% 3.40% 3.80% 4.00% 4.30% 4.60% 4.75% 5.00% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45%

Question 2) The YTM for bonds (see Columns F to Column O) and liquidity premiums (Column P to Column Y ) are given for terms to maturity of 1 to 10 years. Calculate: The expected one year interest rates under the expectations theory Calculate: The expected one year interest rates under the liquidity premium theory. Calculate: Explain the differences under the two theories. Display: Tables/charts with given data and answers

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