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Business, 06.04.2021 01:00 journeyhile5

You have a choice between two different investment​ possibilities: Choice A​: Buying a​ two-year $1,000 bond with an annual interest rate of ​%. You will receive the face value of this bond​ ($1,000) plus an interest payment when this bond matures at the end of two years. Choice B. Buying a​ one-year $1,000 bond with an annual interest rate of ​% and​ then, after one​ year, depositing the proceeds of this bond​ (face value plus​ interest) into a savings account for one year. The savings account is expected to pay an interest rate of ​%.

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