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The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity. Years to Maturity Price, (%

The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity.

Years to Maturity Price, (% of face value)

1 97.652 %

2 94.151

3 90.344

4 86.280

a. What is the 1-year interest rate?

b. What is the 2-year interest rate?

c . What is the 3-year interest rate?

d. What is the 4-year interest rate?

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