Table 1 1 year 2 years3 years 1.30% 2.00% 2.40% Table 1 shows the interest rates for Treasury securities of different maturities. Assume that the liquidity premium theory is correct. Refer to Table 1 0n this day, what did investors expect the interest rate to be on the one-year Treasury bill two years from now if the term premium on a two-year Treasury note is 0.5% and the term premium on a three-year Treasury note is 0.9%? Select one: OA 1.0% O B. 1.3% OC. 1.5% O D. 1.7%
Table 1 1 year 2 years3 years 1.30% 2.00% 2.40% Table 1 shows the interest rates for Treasury securities of different maturities. Assume that the liquidity premium theory is correct. Refer to Table 1 0n this day, what did investors expect the interest rate to be on the one-year Treasury bill two years from now if the term premium on a two-year Treasury note is 0.5% and the term premium on a three-year Treasury note is 0.9%? Select one: OA 1.0% O B. 1.3% OC. 1.5% O D. 1.7%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Table 1
1 year 2 years 3 years
1.30% 2.00%
2.40%
Table 1 shows the interest rates for Treasury securities of different maturities. Assume that the
liquidity premium theory is correct.
Refer to Table 10n this day, what did investors expect the interest rate to be on the one-year
Treasury bill two years from now if the term premium on a two-year Treasury note is 0.5% and
the term premium on a three-year Treasury note is 0.9%?
Select one:
OA 1.0%
O B. 1.3%
OC 1.5%
O D. 1.7%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdd49b60e-9843-47a5-8b5d-3f3394f78711%2F1512f49e-3080-4498-9aad-6f3ee814233e%2Fca4i83k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Table 1
1 year 2 years 3 years
1.30% 2.00%
2.40%
Table 1 shows the interest rates for Treasury securities of different maturities. Assume that the
liquidity premium theory is correct.
Refer to Table 10n this day, what did investors expect the interest rate to be on the one-year
Treasury bill two years from now if the term premium on a two-year Treasury note is 0.5% and
the term premium on a three-year Treasury note is 0.9%?
Select one:
OA 1.0%
O B. 1.3%
OC 1.5%
O D. 1.7%
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