investor will receive Shs 20,000, Shs 15,000 and Shs 30,000 at the end of years one, two and three from today respectively and leave a balance of Shs 1,000. If the rate of interest during years one and three is 8 % per annum and 13% per annum respectively, and the present value of the cashflows is Sha 60,000, what is the rate of interest in year two

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.