Which will you prefer to invest your $1,50O:a) a two year bond with interest rate of 9percent or b) two one year bonds, Year 1,the bond will earn 8% and year 2 thesecond bond will earn 9%.Which bond will you buy?

Investment amount = $ 1500 Option1 = 9% interest rate bond for 2 years Option2 = 8% bond in year 1…

Answered: Which will you prefer to invest your…

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

Problem 1PS

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Similar questions

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How much would you pay for a $30,000, 4 year, 5% bond if I want a return of 7% { assume bond pays intrest every 6 months
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Which will you prefer to invest your $1,500: a) a two year bond with interest rate of 9 percent or b) two one year bonds, Year 1, the bond will earn 8% and year 2 the second bond will earn 9%. Which bond will you buy?