10. Consider the following two bonds: a Treasury bill that will pay you $1,000 in 1 year,...

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10. Consider the following two bonds: a Treasury bill that will pay you $1,000 in 1 year, and a zero-coupon Treasury bond that will pay you

$1,000 in 30 years.

a. Calculate the value of each of these bonds today if interest rates are 4%.

b. Suppose interest rates rise to 8%. What will happen to the price of each bond?

c. Suppose you believe that interest rates are due to rise. Where would you prefer to have your life savings invested, Treasury bills or zero-coupon Treasury bonds? Why?

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Somshukla Chakraborty

I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal. I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).

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