According to the pure expectations theory of interest rates, Finance Basics

According to the pure expectations theory of interest rates

Question: According to the pure expectations theory of interest rates, how much do you expect to pay for a one-year STRIPS on February 15, 2011? What is the corresponding implied forward rate? How does your answer compare to the current yield on a one-year STRIPS? What does this tell you about the relationship between implied forward rates, the shape of the zero coupon yield curve, and market expectations about future spot interest rates?

maturity	price	maturity	price
may '13	99.624	may '16	97.682
may '14	99.218	may '17	96.375
may '15	98.686	may '18	94.686

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Finance Basics: According to the pure expectations theory of interest rates

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