Ask Question
BusinessBusiness
6 October, 21:05

Assuming that the liquidity premium theory is correct, on March 5, 2010, what did investors expect the interest rate to be on the one-year Treasury bill two years from that date if the term premium on a two-year Treasury note was 0.010.01 % and the term premium on a three-year Treasury note was 0.040.04 %?

+4
Answers (1)
  1. 6 October, 21:27
    0
    The completed question is

    Use the data on Treasury securities in the following table to answer the question:Date1 year2 year3 year03/05/20100.360.36% 0.860.86% 1.61.6%Source: U. S. Department of the Treasury. Assuming that the liquidity premium theory is correct, on March 5, 2010, what did investors expect the interest rate to be on the one-year Treasury bill two years from that date if the term premium on a two-year Treasury note was 0.040.04% and the term premium on a three-year Treasury note was 0.050.05%?

    The expected interest rate is 3.013.01%.

    Explanation:

    Base on the scenario been described in the question, the interest rate in given as 3.013.01%.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Assuming that the liquidity premium theory is correct, on March 5, 2010, what did investors expect the interest rate to be on the one-year ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Jonas, an individual, acquired a building nine years ago for $650,000. He sold it in the current year for $680,000 when its adjusted basis was $500,000. Determine the amount and type of gain or loss recognized on the sale
Answers (1)
Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property.
Answers (1)
For our hunterâgatherer ancestors to survive, physical activity was essential. today, what do children and adults in the united states spend an average of 55% of their day doing?
Answers (1)
Assume that instead of cleaning a drain with the drain cleaner, Zhao had attempted to use the cleaner to remove a stubborn stain from his hands, causing extreme burns and loss of feeling in his fingers.
Answers (1)
The management accountant at Woodhaven Cycle Shoppe developed a budget to establish the sales goals at the store in 2012.
Answers (1)
New Questions in Business
You've been taking notes for your boss during his meetings with the Senior Executive for the organization.
Answers (1)
Which of the following is a record of a transaction that already happened and was paid for? A. an invoice B. A bill C. A receipt D. A receivable
Answers (2)
A company purchased a two-year fire insurance policy on May 1, 2012. It paid the $2,400 premium in cash on the same date and recorded the entry with a debit to Prepaid Insurance for $2,400.
Answers (1)
Market segments that can be effectively reached and served are said to be
Answers (1)
9. An expenditures incurred on factors of production A, cost B, input C, fixed input D, variable input
Answers (1)
Home » Business » Assuming that the liquidity premium theory is correct, on March 5, 2010, what did investors expect the interest rate to be on the one-year Treasury bill two years from that date if the term premium on a two-year Treasury note was 0.010.
Sign Up Forgot Password?