Multiple Choice
Suppose that a risk-neutral investor has a choice between buying a one-year bond paying 4 percent today, a two- year bond paying 5 percent today, a three-year bond paying 5.3 percent today, or a four-year bond paying 5.8 percent today.The investor would buy
A) a one-year bond today.
B) a two-year bond today.
C) a three-year bond today.
D) a four-year bond today.
Correct Answer:
Verified
Correct Answer:
Verified
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