6. 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

97.652

%

2

94.151

3

90.344

4

86.280

**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?

## "Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"