Question
Suppose that the price of discount bonds maturing in years 1, 2, 3, 4, and 5 are given (respectively) by Price Time to Maturity 940
Suppose that the price of discount bonds maturing in years 1, 2, 3, 4, and 5 are given (respectively) by
| Price | Time to Maturity |
| 940 | 1 |
| 870 | 2 |
| 800 | 3 |
| 715 | 4 |
| 630 | 5 |
Consider the following risk-free investments. Which is best?
|
| T=0 | 1 | 2 | 3 | 4 | 5 |
| Investment A | -40 | 20 | 15 | 10 | 5 | 1 |
| Investment B | -10 | 1 | 5 | 10 | 15 | 20 |
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Unlimited Business Financing
Authors: Trent Lee, Dr Chad Lee
1st Edition
1934275050, 9781934275054
