Question: The following is a table regarding interest rate data on government debt securities with different maturities (tenors) (1, 2, and 3 years): On March 26,

The following is a table regarding interest rate data on government debt securities with different maturities (tenors) (1, 2, and 3 years):

On March 26, 2019, what is the expected interest rate investors will receive for government debt securities with a tenor of one year when the investor decides to hold the debt securities for two years from that date? For additional information, the liquidity premium on government debt securities with a two-year tenor is 0.5%. The liquidity premium on government debt instruments with a three-year tenor is 1% (Hint: You are assuming that the liquidity premium theory is correct so that you can use the formula from that theory.)

Period 1 Year 2 Years 3 Years 03/26/2019 1.39% 2.95% 3.5%

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