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Question no 2: Which of the following investments do you prefer? (a) $4,500 in a deposit (perfectly safe) that gives 10% compounded semiannually for 10

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Question no 2: Which of the following investments do you prefer? (a) $4,500 in a deposit (perfectly safe) that gives 10% compounded semiannually for 10 years. (b) $4,500 in a deposit (perfectly safe) that gives 12% compounded daily (365 days) for 8 years. Question no 3: (a) Suppose that you have purchased a 3-year zero-coupon bond with face value of $1000 and a price of $850. If you hold the bond to maturity, what is your annual rate of return? (b) Now suppose you have purchased a 3-year bond with face value of $1000, a 7% annual coupon, and a price of $975. Assuming that you hold the bond to maturity, is the [RR greater or less than the return on the bond in part (a)? Question no 4: Which of the following investments do you prefer? (c) $270 in 10 years from today (d) $100 in a deposit (perfectly safe) that gives 10% compounded daily (365 days) for 10 years

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