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  3. you observe the following current treasury yields:

You observe the following current Treasury yields: 1R1 = 2.52%; 1R2 = 2.75%; 1R3...

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Finance

You observe the following current Treasury yields:

1R1 = 2.52%; 1R2 = 2.75%; 1R3 = 3.31%; 1R4 = 4.08%; 1R5 = 4.77%

You also believe that the liquidity premiums are:

L2 = 0.04%; L3 = 0.11%; L4 = 0.14%; L5 = 0.2%

If the liquidity premium theory holds, what is the expected one-year rate four years from now?

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