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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 98.652%
2 95.151
3 91.344
4 87.280
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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