What is the current rate on a four-year treasury


Liquidity Premium Hypothesis Based on economists' forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: R1 = 7.20% E(r2) = 8.30% L2 = .65% E(r3) = 8.40% L3 = .75% E(r4) = 8.70% L4 = .80% Using the liquidity premium hypothesis, what is the current rate on a four-year Treasury security?

8.1500% 

9.5000%

8.1490%

8.6960%

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Financial Management: What is the current rate on a four-year treasury
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