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BOND 7. Which security has a higher effective annual interest rate? a. A three-month T-bill selling at $97,645 with par value $100,000 b. A coupon

BOND

7. Which security has a higher effective annual interest rate?

a. A three-month T-bill selling at $97,645 with par value $100,000

b. A coupon bond selling at par and paying a 10 percent per year coupon semi-annually

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