If asset A is a 10-year Treasury bond which has no default risk and is yielding...

If asset A is a 10-year Treasury bond which has no default risk and is yielding 4% while asset B is a 15-year Treasury bond with no default risk also yielding 4%, investors would

		prefer asset A.
		prefer asset B.
		be indifferent between the two assets.
		require more information before choosing asset A or asset B.

Solutions

Expert Solution

Option (1) is right option. Asset A will be preferred because time period ofvtreasury bond is less as compare to asset B. It means that individula will get 4 % yield after 10 years only where as Individual has to wait to get same return on asset B for 15 years.

Rahul Sunny answered 1 year ago

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