Suppose we observe the following rates: 1R1 = 13.0%, 1R2 = 17.0%, and E(21) = 21.0%. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2? Note: Round your intermediate calculations to 5 decimal places and final percentage answer to 2 decimal places (e.g., 32.16). × Answer is complete but not entirely correct. Liquidity premium for year 2 0.00 % Return to question

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