Question: Answer the below questions. (a) What are the limitations of using Treasury strips to construct the theoretical spot rate curve? (b) When Treasury strips are

Answer the below questions.
(a) What are the limitations of using Treasury strips to construct the theoretical spot rate curve?
(b) When Treasury strips are used to construct the curve, why are only strips used?

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a There are three problems with using the observed rates on strips First the liquidity of the strips ... View full answer

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