U.S. Treasury STRIPS, close of business February 15, 2019: Maturity Feb 2020 Price 97.123 Maturity Price Feb 2023 90.066 Feb 2021 94.770 Feb 2024 Feb 2022 92.424 Feb 2025 87.528 85.410 a. According to the pure expectations theory of interest rates, how much do you expect to pay for a five-year STRIPS on February 15, 2020? (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 February 15, 2022? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.) Price
U.S. Treasury STRIPS, close of business February 15, 2019: Maturity Feb 2020 Price 97.123 Maturity Price Feb 2023 90.066 Feb 2021 94.770 Feb 2024 Feb 2022 92.424 Feb 2025 87.528 85.410 a. According to the pure expectations theory of interest rates, how much do you expect to pay for a five-year STRIPS on February 15, 2020? (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 February 15, 2022? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.) Price
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:U.S. Treasury STRIPS, close of business February 15, 2019:
Maturity
Feb 2020
Price
97.123
Maturity
Price
Feb 2023
90.066
Feb 2021 94.770
Feb 2024
Feb 2022 92.424
Feb 2025
87.528
85.410
a. According to the pure expectations theory of interest rates, how much do you expect to pay for a five-year STRIPS on
February 15, 2020? (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
February 15, 2022? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.)
Price
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