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U.S. Treasury STRIPS, close of business November 15, 2015: Maturity November '16 November '17 November '18 Price 99.471 98.782 96.827 Maturity November 19 November 20

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U.S. Treasury STRIPS, close of business November 15, 2015: Maturity November '16 November '17 November '18 Price 99.471 98.782 96.827 Maturity November 19 November 20 November '21 Price 95.035 92.570 89.342 a. According to the pure expectations theory of interest rates, how much do you expect to pay for a five-year STRIPS on November 15, 2016? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.) Price b. According to the pure expectations theory of interest rates, how much do you expect to pay for a two-year STRIPS on November 15, 2018? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.) Price

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