You are asked to construct a yield curve from the following information:
RATE TERM YIELD PRICE
T-Bill 6 month 7.900%
T-Bill 12 month 8.650%
0.750 T-Note 18 month 87.8356
You purchase a $10,000 0.750 T-Note at the quoted price of 87.8356
You can sell the six month coupon for ______$
You can sell the twelve month coupon for ______$
And to break even you must sell the remaining eighteen month paper for ______$
Therefore the eighteen month, zero coupon yield must be ______%