Prices of a sample of treasury strips

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

Years to MaturityPrice, (% of face value)

1 98.752%

2 95.251

3 91.444

4 87.380

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: EM132531323

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