In: Finance
One-year Treasury bills currently earn 4.00 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.20 percent. The liquidity premium on 2-year securities is 0.06 percent. If the liquidity theory is correct, what should the current rate be on 2-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)