Problem
The one-year interest rates over the next 10 years will be 3%, 4.5%, 6%, 7.5%, 9%, 10.5%, 13%, 14.5%, 16%, and 17.5%. Assume that investors prefer holding short-term bonds so that a liquidity premium of 15 basis points is required for each year of a bond's maturity.
What will be the interest rates on a three-year bond, a six-year bond, and a nine-year bond? List your answer in percent form, with two decimal places.