Calculate values of 10 year Treasury Strips
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1. Calculate the value of a 10-year Treasury STRIP if the Treasury 10-year spot rate is 6-1/8%.
2. Calculate the value of the Treasury STRIP in Problem #1 five years from now with the following expected Treasury spot rate curve:
6-month 6-7/8%
2-year 7-1/8%
5-year 7-3/8%
10-year 7-3/4%
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Solution Summary
This solution helps calculate the values of treasury strips.
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using BA 2 plus calculator (you can also use Excel)
1.
N= 10
i = 6.125%
pmt= 0
Fv= 1000
compute PV= $551.85
2a.
N= 5
i = 6.99% ...
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