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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 1 2

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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 1 2 3 Price, (of face value) 97.8524 94.351 90.544 86.480 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? a. Interest rate b. Interest rate . Interest rate d. Interest rate e. Is the yield curve upward-sloping, downward-sloping, or flat? 1 Is this the usual shape of the yield curve

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