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Eleanor would like to invest a certain amount of money for three years and considers investing in (1) a one-year bond that pays 3 percent,

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Eleanor would like to invest a certain amount of money for three years and considers investing in (1) a one-year bond that pays 3 percent, followed by a two-year bond that pays the forward rate, or (2) a three-year bond that pays 7 percent in each of the next three years. Eleanor is considering the following investment strategies: Strategy A: Buy a one-year bond that pays 3 percent in year one, then buy a two-year bond that pays the two-year forward rate in years two and three. Strategy B: Buy a three-year bond that pays 7 percent in each of the next three years. If the two-year bond purchased one year from now pays 12 percent annually, Eleanor will choose Which of the following describes conditions under which Eleanor would be indifferent between Stra Strategy A rategy B? Strategy B The rate on the two-year bond purchased one year from now is 8.333 percent. The rate on the two-year bond purchased one year from now is 9.058 percent. The rate on the two-year bond purchased one year from now is 9.511 percent. The rate on the two-year bond purchased one year from now is 9.873 percent

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