a. Suppose a U.S. Treasury bill, maturing in one year, can be purchased today for $92,500. Assuming
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b. Suppose a National Telephone and Telegraph (NTT) Company bond, maturing in one year, can be purchased today for $975. Assuming that the bond is held until maturity, the investor will receive $1,000 (principal) plus 7 percent interest (that is, 0.07 × $1000 = $70). Determine the rate of return on this investment.
c. Determine the implied risk premium on NTT bonds.
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Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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