Question: The one year interest rate is 4% . The interest rate for a two year security is 6% . The one year 10 interest rate

The one year interest rate is 4% . The interest rate

The one year interest rate is 4% . The interest rate for a two year security is 6% . The one year 10 interest rate one year from now is 8 34% . According to the liquidity preference theory , the risk premium for the second one - year investment is: 0. 34 % a 1.66 % b 0.30 % 0.50% d

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