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A 2 - year $ 1 , 0 0 0 par zero - coupon bond is currently priced at $ 8 1 9 . 0
A year $ par zerocoupon bond is currently priced at $ A year $ annuity is currently priced at $ If you want to invest $ in one of the two securities which is a better buy? You can assume
the pure expectations theory of interest rates holds,
neither bond has any default risk, maturity premium, or liquidity premium, and
you can purchase partial bonds.
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