One-year T-bill rates over the next four years are expected to be 3%, 4%, 5%, and 5.5%.

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One-year T-bill rates over the next four years are expected to be 3%, 4%, 5%, and 5.5%. If four-year T-bonds are yielding 4.5%, what is the liquidity premium on this bond?

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Financial Markets And Institutions

ISBN: 978-0132136839

7th Edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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Question Posted: Nov 12, 2012 01:09 AM

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One-year T-bill rates over the next four years are expected to be 3%, 4%, 5%, and 5.5%.

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