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Suppose That Albert Can Buy a Bond for $1,000 That

Question 114

Multiple Choice

Suppose that Albert can buy a bond for $1,000 that matures in two years and pays Albert $1,102.5 with certainty.He is indifferent between this bond and one that has some risk but on which the interest rate is 3% higher.How much,to the nearest penny,does the riskier bond pay in two years?


A) $1,160.00
B) $1,166.40
C) $1,168.65
D) $1,169.64

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