If the liquidity premium theory of the term structure of
Suppose we observe the following rates: 1R1 = 0.50%, 1R2 = 1.15%, and E(2r1) = 0.929%. If the liquidity premium theory of the term structure of risk-free rates holds, what is the liquidity premium for year 2, L2?
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suppose we observe the following ratesnbsp1r1nbsp 050nbsp1r2nbsp 115 and e2r1 0929 if the liquidity premium theory of
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