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 annualized yield of 3%.

b. A one-year savings deposit at a bank offering an interest rate of 4.5%.

c. A 20-year U.S. Treasury bond offering a yield to maturity of 6% per year.

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

LO.1