4. You have $5,000 to invest for the next year and are considering three alternatives: a. A...

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4. You have $5,000 to invest for the next year and are considering three alternatives:

a. A money market fund with an average maturity of 30 days offering a current yield of 6% per year.

b. A 1-year savings deposit at a bank offering an interest rate of 7.5%.

c. A 20-year U.S. Treasury bond offering a yield to maturity of 9% per year.

What role does your forecast of future interest rates play in your decisions?

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Investments

ISBN: 9780077261450

8th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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