Question: 6. The table below shows the current and expected future one year interest rates, as well as current interest rates on multi-year bonds. Use the

6. The table below shows the current and expected future one year interest rates, as well as current interest rates on multi-year bonds. Use the table to calculate the liquidity premium for each multi-year bond.

Year 1-Year Bond Rate Multi-Year Bond Rate

1 2% 2%

2 3% 3%

3 4% 5%

4 6% 6%

5 7% 8%

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