Based on economistsAc€?c forecasts and analysis, 1-year Treasury

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Based on economistsAc€?c forecasts and analysis, 1-year Treasury bill rates and liquidity

Based on economistsAc€?c forecasts and analysis, 1-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows:


R₁	=	1.30%
E(₂r₁)	=	2.45%	L₂	=	0.05%
E(₃r₁)	=	2.55%	L₃	=	0.10%
E(₄r₁)	=	2.85%	L₄	=	0.12%

Using the liquidity premium theory, plot the current yield curve. Make sure you label the axes on the graph and identify the four annual rates on the curve both on the axes and on the yield curve itself. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Year	Current (Long-term) Rates
1		%
2		%
3		%
4		%

Abhinav 03-Dec-2019

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Based on economistsAc€?c forecasts and analysis, 1-year Treasury bill rates and liquidity

Based on economistsAc€?c forecasts and analysis, 1-year Treasury bill rates and liquidity

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