The following table shows the prices of a sample of Narnian Treasury strips in December 2018. Each strip makes a single payment of $1,000 at maturity.
a. Calculate the annually compounded, spot interest rate for each year.(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
b. Is the term structure upward- or downward-sloping or flat?
multiple choice 1
c. Would you expect the yield on a coupon bond maturing in December 2023 to be higher or lower than the yield on the 2020 strip?
multiple choice 2
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