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An investor expects interest rates to increase, but bond prices do not yet reflect that expectation. Which of the following is the best bond to
An investor expects interest rates to increase, but bond prices do not yet reflect
that expectation. Which of the following is the best bond to buy?
1. A 7% coupon paying bond with 8 years to maturity
2. A zero coupon bond with 8 years to maturity
3. A 1% coupon paying bond with 1 year to maturity
4. A zero coupon bond with 1 years to maturity
5. A 10-year zero coupon paying bond
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