Question
An investor wants to purchase a 2 year treasury bond, and the broker provides the investor with the following two alternatives. a) A $10,000
An investor wants to purchase a 2 year treasury bond, and the broker provides the investor with the following two alternatives. a) A $10,000 10 year Treasury bond issued on March 8, 2013 that matures on March 8 2023. The bond has a stated interest rate of 4% and pays interest semiannually. b) A $10,000 two year treasury bond issued today with a stated interest rate of 2%. How much will the investor have to pay to purchase each of these two bonds?
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