Each strip makes single payment at maturity

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Reference no: EM131819369

The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity.

Years to Maturity Price, (% of face value)

1 97.352 %

2 93.851

3 90.044

4 85.980

a. What is the 1-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. What is the 2-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c. What is the 3-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

d. What is the 4-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Reference no: EM131819369

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