The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity. Calculate the interest rate offered by each of these strips.

years of maturity Prices, %

1 97.052%

2 93.551%

3 89.744%

4 85.680%

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

interst rate _____________%

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

interst rate ______________%

c. is th yield curve upward-sloping, downward-slopping, or flat?

d. is this the usual shape of the yield curve?