What is the two-year interest rate

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Reference no: EM132477497

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)197.552%294.051 390.244 486.180

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

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

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

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

Question e. Is the yield curve upward-sloping, downward-sloping, or flat?

Question f. Is this the usual shape of the yield curve?

Reference no: EM132477497

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