Suppose the yield on five year strips is 850 percent and


Suppose the yield on five year STRIPS IS 8.50 percent and the yield on three-year STRIPS is 8.20percent. Based on the expectations theory, what is the implied yield on two year STRIPS three years from now ?

How would you calculate this on a financial BAII plus calculator ?

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Financial Management: Suppose the yield on five year strips is 850 percent and
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