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

question 104

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 should be the current rate on four-year Treasury securities?

• A) 6.59 percent
• B) 6.75 percent
• C) 6.82 percent
• D) 7.13 percent

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Definitions:

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