what does this tell you about the relationship between implied forward rates the sha 664818

U.S. Treasury STRIPS, close of business February 15, 2008:

Treasury STRIPS Calculate the quoted yield for each of the STRIPS given in the table above. Does the market expect interest rates to go up or down in the future?

Treasury STRIPS What is the yield of the two year STRIPS expressed as an EAR?

Forward Interest Rates According to the pure expectations theory of interest rates, how much do you expect to pay for a one year STRIPS on February 15, 2009? 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?