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Liquidity Premium Hypothesis Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity...

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Accounting

Liquidity Premium Hypothesis 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:
R1=7.50%
E(r2)=8.60%L2=.95%
E(r3)=8.70%L3=1.05%
E(r4)=9.00%L4=1.10%
Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security?
Multiple Choice
8.4490%
9.2200%
10.1000%
8.4500%
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