Question
The following table shows the prices of a sample of Treasury bonds, all of which have coupon rates of zero. Each bond makes a single
The following table shows the prices of a sample of Treasury bonds, all of which have coupon rates of zero. Each bond makes a single payment at maturity.
Years to Maturity | Price (% of face value) |
---|---|
1 | 98.252% |
2 | 94.751 |
3 | 90.944 |
4 | 86.880 |
What is the 1-year interest rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
What is the 2-year interest rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
What is the 3-year interest rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
What is the 4-year interest rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Is the yield curve upward-sloping, downward-sloping, or flat?
Is this the usual shape of the yield curve?
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