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You need $1,000,000 in 10 years. You want to purchase a bond. Which of the following types of bonds would remove the reinvestment risk from
You need $1,000,000 in 10 years. You want to purchase a bond. Which of the following types of bonds would remove the reinvestment risk from your investment?
Question 4 options:
None of these answers
Buy 100 10 year zero coupon bonds that will mature to $1,000,000 in 10 years.
Buy 67 10 year 5% coupon bonds selling at par
Buy 67 10 year 5% coupon bond selling at a discount
Buy 67 10 year 5% coupon bonds selling at a premium
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