Problem 9-14 Treasury STRIPS (LO3, CFA1)

U.S. Treasury STRIPS, close of business November 15, 2015:

Maturity	Price			Maturity	Price
November 16		99.471		November 19		95.035
November 17		98.782		November 20		92.570
November 18		96.827		November 21		89.342

a. Calculate the quoted yield for each of the STRIPS given in the table above. (Input all amounts as positive values. Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.)

b. Does the market expect interest rates to go up or down in the future?