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QUESTION 8 Suppose that the spot interest rate on a one-year zero-coupon bond is 0.5% and the spot interest rate on a two-year zero-coupon bond
QUESTION 8 Suppose that the spot interest rate on a one-year zero-coupon bond is 0.5% and the spot interest rate on a two-year zero-coupon bond is 1.596. If you expect the one-year interest rate starting in one year to be 3.096, what is the optimal investment strategy for a two-year investment? O Buy a two-year bond O Buy a one-year bond and plan to buy a second one-year bond next year
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