You have $5000 to invest for the next year and are considering three alternatives: a money market fund with an average maturity of 30 days offering a current yield of 6% per year. a 1-year savings deposit at a bank offering an interest rate of 7.5% a 20-year U.S. Treasury bond offering a yield to maturity of 9% per year What role does your forecast of future interest rates play in your decisions?
You have $5000 to invest for the next year and are considering three alternatives: a money market fund with an average maturity of 30 days offering a current yield of 6% per year. a 1-year savings deposit at a bank offering an interest rate of 7.5% a 20-year U.S. Treasury bond offering a yield to maturity of 9% per year What role does your forecast of future interest rates play in your decisions?
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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You have $5000 to invest for the next year and are considering three alternatives:
-
a
money market fund with an average maturity of 30 days offering a current yield of 6% per year. -
a 1-year savings deposit at a bank offering an interest rate of 7.5%
-
a 20-year U.S. Treasury bond offering a yield to maturity of 9% per year
What role does your
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