Use the following information to answer the next question:

U.S. Treasury STRIPS, close of business Aug. 15, 2017:

According to the pure expectations theory of interest rates, how much would you expect to pay for a one-year STRIPS on Aug 15, 2017? What is the corresponding implied forward rate? How does your answer compare to the current yield-to-maturity on a one-year STRIPS? What does this tell you about the relationship between implied forward rates, the shape of the zero coupon yield curve, and market expectations about future spot interest rates?

Maturity Price 3 Aug'18 Aug 19 Aug '20 Aug 21 Aug 22 Aug '23 98.712 97.2T8 95433 93.269 90.994 88.865