Liquidity premium on a three-year treasury

Reference no: EM13742685

The Wall Street Journal reports the rate on two-year Treasury securities is 4.15% and the rate on three-year Treasury securities is 5.27%. The one-year interest rate expected in two years, E(₃r₁), is 7.11%. According to the liquidity premium theory, what is the liquidity premium on a three-year Treasury, L₃?

4.36%

4.90%

0.44%

0.49%

None of the above

Reference no: EM13742685

Questions Cloud

Identify the different regions of english colonial america : Identify the different regions of English colonial America during the 1700s. Describe each region, being sure to include information concerning religion, economics, government, and culture.

Sales and collection process : The Beach Dude (BD) employs a legion of current and former surfers as salespeople who push its surfing-oriented products to various customers (usually retail outlets). This case describes BD's sales and collection process.

Explain the process of plant germination : Explain to me the process of plant germination

Describe the goal of phylogenetic systematics : Describe the goal of phylogenetic systematics

Liquidity premium on a three-year treasury : The Wall Street Journal reports the rate on two-year Treasury securities is 4.15% and the rate on three-year Treasury securities is 5.27%. The one-year interest rate expected in two years, E(3r1), is 7.11%. According to the liquidity premium theo..

What are the components of physical examination : Use knowledge of biological principles and the Scientific Method to ask and answer relevant questions about human health and disease Analyze information to distinguish between diseased and healthy structure and functioning.What are the components of..

Calculating and understanding a firm optimal : Calculating and understanding a firm's optimal or sustainable growth rate is critical to the goal of maximizing shareholders' wealth and developing an optimal capital structure.

Write an essay on border ruffian and civil war : Use the following terms in a short paragraph about Kansas in the 1850's. Border ruffian and Civil war.

Calculate and evaluate the firm sustainable growth rate : Using the company's financial statements, calculate and evaluate the firm's sustainable growth rate (SGR) for the last 2-3 years, and summarize your findings in your paper. Be sure to address the following:

User Account

All Pages