Chapter 12, Problem 24PS

You have $\$\text{5},000$ to invest for the next year and are considering three alternatives:
a. A money market fund with an average maturity of $\text{3}0$ days offering a current annualized yield of $\text{3}\%$ .
b. A two-year CD at a bank offering an interest rate of $\text{4}.\text{5}\%$ .
c. A $\text{2}0$ -year U.S. Treasury bond offering a yield to maturity of $\text{6}\%$ per year.
What role does you forecast of future interest rates play in your decision? $\left(\text{LO 12}-\text{1}\right)$