Topic: Annuities and Loans

Treasury bilis and Treasury notes are an investment security issued by the U$.$S$.$ government. A Treasury bill matures within $1$ year and investors typically roll over the matured Treasury bill and purchase another Treasury bill the same day. Treasury notes have maturities of up to $10$ years:

You are considering investing $$$0,000$ in a Treasury bill that you will renew every $6$ months or a Treasury note that you will holid until maturity Your rmvestment time frame is $9$ years.

Current investment opportunity interest rates arc $5\%$ and are expected to increase to $7\%$ in $6$ months. Would you invest in the freasury bill that vou can roll cover every o months and reinvest in$,$ or leave your money in the Treasury hole that will mature in $9$ vears? Discuss vour reasoning.