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Musashi 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

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Musashi 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 8 percent. Musashil is considering the following investment strategles: Strategy A: In the first year, buy a one-year bond that pays 3 percent, Once that bond matures, buy another oneyear bond that pors the forward rate. Strategy B: In the first year, buy a two-year bond that pays 8 percent annually. If the one-year bond purchased in year two pays 12 percent, Musashi will choose Which of the following describes conditions under which Musashi would be indifferent between Strategy A and Strategy B? The rate on the one-year bond purchased in year two pavs 12.448 percent. The rote on the one-year bond purchased in year two pays 13.243 percent. The rate on the one-year bond purchased in vear two pays 13.873 percent, The rate on the one-year bond purchased in year two pays 14,302 percent

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