Ms. Callan, a citizen of the United States who resides in the country, wants to invest in a UK government bond that matures in 10 years. The government bond in which she will invest pays interest once a year in British pounds, and the principal repayment is also in British pounds. The government bond she is considering pays 4% and she belies that interest rate over the next 20 years in the United Kingdom will not fall below 4%. In the opinion of Ms. Callan, she will be able earn at a minimum a 4% return on her investment. What is your opinion regarding the risks of realizing at least a 4% return?
Ms. Callan, a citizen of the United States who resides in the country, wants to invest in a UK government bond that matures in 10 years. The government bond in which she will invest pays interest once a year in British pounds, and the principal repayment is also in British pounds. The government bond she is considering pays 4% and she belies that interest rate over the next 20 years in the United Kingdom will not fall below 4%. In the opinion of Ms. Callan, she will be able earn at a minimum a 4% return on her investment. What is your opinion regarding the risks of realizing at least a 4% return?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Ms. Callan, a citizen of the United States who resides in the country, wants to invest in a UK government bond that matures in 10 years. The government bond in which she will invest pays interest once a year in British pounds, and the principal repayment is also in British pounds. The government bond she is considering pays 4% and she belies that interest rate over the next 20 years in the United Kingdom will not fall below 4%. In the opinion of Ms. Callan, she will be able earn at a minimum a 4%
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