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Beth would like to invest a certain amount of money for two years and considers investing in a one - year bond that pays 3

Beth would like to invest a certain amount of money for two years and considers investing in a one-year bond that pays 3 percent and a two-year bond that pays 7 percent. Beth is considering the following investment strategies:
Strategy A: In the first year, buy a one-year bond that pays 3 percent. Once that bond matures, buy another one-year bond that pays the forward rate.
Strategy B: In the first year, buy a two-year bond that pays 7 percent annually.
If the one-year bond purchased in year two pays 7 percent, Beth will choose .

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