Based on Economists' Forecasts and Analysis,one-Year Treasury Bill Rates and Liquidity

question 12

Multiple Choice

Based on economists' forecasts and analysis,one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: Using the liquidity premium theory,what is the current rate on a four-year Treasury security?

• A) 7.736 percent
• B) 7.600 percent
• C) 7.738 percent
• D) 8.400 percent