Question: The table below shows current and expected future one-year interest rates, as well as current interest rates on multi-year bonds. Use the table to calculate

The table below shows current and expected future one-year interest rates,

The table below shows current and expected future one-year interest rates, as well as current interest rates on multi-year bonds. Use the table to calculate the liquidity premium for each multi-year bond. Year 1 2 3 4 5 One-Year Bond Rate 2.00% 3.00% 6.00% 7.00% 8.00% Multi-year Bond Rate 2.00% 3.00% 6.00% 8.00% 10.00% The liquidity premiums for each year are given as: (Enter your responses rounded to two decimal places.) 111 = % 121 = % 131 % % 151 %

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