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20 years Suppose the term structure of interest rates is shown below: Term 1 year 2 years 3 years 5 years 10 years Rate (EAR%)

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20 years Suppose the term structure of interest rates is shown below: Term 1 year 2 years 3 years 5 years 10 years Rate (EAR%) 5.00% 4.80% 4.60% 4.50% 4.25% 4.15% Consider an investment that pays $1,300 certain at the end of each of the next four years. If the investment costs $4.550 and has a net present value (NPV) of $97, then the four year risk-free interest rate is closest to: O A. 4.01% OB. 5,01% OC. 3.51% OD. 4.51% Click to select your

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