Business

1 July, 23:03

9. Suppose an investor has two choices:Choice 1: invest in a Bond A which is a 2-year bond with an interest rate of 12% Choice B: two 1-year bonds with sequential interest payment of 10% and 14%? Which Choice would produce a greater return if the pure expectations theory was to hold true. *

A) Choice A

B) Choice B

C) Both of the choices would produce the same return

D) We can't tell.

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