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Question 8: From the following prices of US Treasury strips (zero coupon bonds) which makes...

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Question 8: From the following prices of US Treasury strips (zero coupon bonds) which makes a payment in single time at maturity, calculate spot rates for the 1st year and 2nd year. Face value of the strip is $105. Maturity Price 1 $99.60 2 $95.10 Choose an answer A: The spot rate for the 1st year is 1.95%, Spot rate for the 2nd year is 1.11%. B: The spot rate for the 1st year is 94.05% Spot rate for the 2nd year is 2.04%. C: The spot rate for the 1st year is 6.53%, Spot rate for the 2nd year is 0.22%. D: The spot rate for the 1st year is 5.42%, Spot rate for the 2nd year is 5.08%

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