A Treasury Bill Is a Zero-Coupon Instrument

question 12

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.

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Definitions:

Do...While Loop

A control flow statement in programming that repeatedly executes a block of code at least once and then repeats as long as a specified condition remains true.

Pretest Loop

A pretest loop is a control structure that tests its condition before the body of the loop is executed, ensuring that the loop body may not run at all if the condition is not met initially.

Logical Expression

A statement that evaluates to true or false, often used in conditions and decision making.