1. Which of the following investment that pay $6500 in four years will have a higher price today? Assume that both investments have equal risk.

a. The security that earns an interest rate of 11.50%

b. The security that earns an interest rate of 17.25%

2. Earic wants to invest in government securities that promise to pay $1000 at a maturity. The opportunity cost (interest rate) of holding the security is 4.00% . Assuming that both investment have equal risk and Earic's investment time horizon is flexible , which of the following investment option is priced lower?

a. An investment that matures in four years

b. An investment that matures in three years