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 97.152%

2 93.651

3 89.844

4 85.780

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?

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