Question: Answer given is A.6.08% but wasnt sure how to get there. 8. The one-year interest rate over the next three years is expected to be

Answer given is A.6.08% but wasnt sure how to get there.

8. The one-year interest rate over the next three years is expected to be 3.00%, 5.00% 8.00%. The liquidity premium for one-to three-year bonds: 0%, 0.25%, 0.75%. What is the interest rate on the three year bond? A. 6.08% B. 5.67% C. 5.75% D. 6.33%

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