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Please answer. A two-year Treasury strip has a yield of 6%, and the three Treasury strip has a yleld of 6.37%. Marry thinks the one-year
Please answer. A two-year Treasury strip has a yield of 6%, and the three Treasury strip has a yleld of 6.37%. Marry thinks the one-year interest rate will be 9.09% in two years, and she willing to put her money where her mouth is. (Assume that all securities are zero-coupon securities, and that market participates can lead and borrow at the same rate) What is the price of the two-year Treasury strip? 8:42 $ What is the price of the three-year Treasury strip? $ If Marry buys the two years Treasury and reinvests the proceeds from the two-year Treasury into a one-year Treasury, then how many two-year Treasuries does Marry need to buy today if she wants $1,000 in three years? % (Answer as a percent of $1,000 par value) If Marry wants $1,000 in three years, how much money would Marry needs to spend on the two-year Treasury if she expects to roll the proceeds over in the second year at 9.09%? If Marry wants to speculate on the future interest rate but doesn't want to invest any money, then what strategy will she take if she believes the one-year interest rates will be 9.09% in two years? (Assume borrow and leading at the same rate) Click to selecti According to the expectation hypotheses, what rate does the market expect the one-year rate will be in two years
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