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The following tables shows the prices of a sample of treasury strips. Each strip makes a single payment at maturity. Years to maturity Price, (%
The following tables 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 98.352%
2 94.851
3 91.044
4 86.980
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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