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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 MaturityPrice, (% of

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

Years to MaturityPrice, (% of face value)198.552%295.051391.244487.180

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

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

c.What is the 3-year interest rate?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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

e.Is the yield curve upward-sloping, downward-sloping, or flat?

  • Upward-sloping
  • Downward-sloping
  • Flat

f.Is this the usual shape of the yield curve?

  • Yes
  • No

rev: 03_05_2018_QC_CS-120510

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