Multiple Choice
A Treasury bill is a zero-coupon instrument. Therefore, its annualized yield is equal to the spot rate. Similarly, for the one-year Treasury, its cited yield is the one-year spot rate. Given these two spot rates, we can compute the spot rate for ________.
A) a theoretical 0.5-year zero-coupon Treasury.
B) a theoretical 1.0-year zero-coupon Treasury.
C) a theoretical 1.5-year zero-coupon Treasury.
D) a theoretical 2.0-year zero-coupon Treasury.
Correct Answer:
Verified
Correct Answer:
Verified
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