Question: Question 45 (1 point) Situation 6-1 Over the next three years, the expected path of 1-year interest rates is 4, 4, and 1 percent, and

Question 45 (1 point) Situation 6-1 Over the next three years,

Question 45 (1 point) Situation 6-1 Over the next three years, the expected path of 1-year interest rates is 4, 4, and 1 percent, and the 1-yaer, 2-year, and 3-year term premia are 0, 0.5, and 1 percent, respectively. Using the information in Situation 6-1, the liquidity premium theory of the term structure predicts that the current interest rate on 3-year bond is ---------- %. Question 45 (1 point) Situation 6-1 Over the next three years, the expected path of 1-year interest rates is 4, 4, and 1 percent, and the 1-yaer, 2-year, and 3-year term premia are 0, 0.5, and 1 percent, respectively. Using the information in Situation 6-1, the liquidity premium theory of the term structure predicts that the current interest rate on 3-year bond is ---------- %

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