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Which of the following bonds would you pay more to invest in and why? Explain your reasons! A bond with a guaranteed payout of $

Which of the following bonds would you pay more to invest in and why? Explain your reasons!

A bond with a guaranteed payout of $

300

at the end of a year

A bond with a

5 %

chance of a $

1000

payout and a

95 %

chance of a $

100

payout

What are some of the most important risks associated with bonds?

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