One-Year Treasury Bills Currently Earn 4

One-year Treasury bills currently earn 4.5 percent. You expect that one year from now, one-year Treasury bill rates will increase to 6.65 percent. The liquidity premium on two-year securities is 0.05 percent. If the liquidity theory is correct, what should the current rate be on two-year Treasury securities?

A) 5.24 percent
B) 5.59 percent
C) 5.65 percent
D) 5.95 percent