Question: [Related to Solved Problem 5.2b] Use the data on Treasury securities in the following table to answer the question: Date 03/05/2010 Source: U.S. Department of
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[Related to Solved Problem 5.2b] Use the data on Treasury securities in the following table to answer the question: Date 03/05/2010 Source: U.S. Department of the Treasury. 1 year 0.37% 2 year 0.9% 3 year 1.64% Assuming that the liquidity premium theory is correct, on March 5, 2010, what did investors expect the interest rate to be on the one-year Treasury bill two years from that date if the term premium on a two-year Treasury note was 0.03% and the term premium on a three-year Treasury note was 0.06%? The expected interest rate is %. (Round your response to two decimal places.)
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