(Solution) - What spot interest rates are implied by the following Treasury -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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What spot interest rates are implied by the following Treasury bonds? Assume for simplicity that the bonds pay annual coupons. The price of a one-year strip is 97.56%, and the price of a four-year strip is 87.48%.