Question: QUESTION 2 a) Explain, in no more than 100 words, why short-term Treasury securities, such as Treasury bills, are considered to be safer investments than

QUESTION 2 a) Explain, in no more than 100 words, why short-term Treasury securities, such as Treasury bills, are considered to be safer investments than longer-term government bonds. [10 marks) b) Wilfred plc issued a bond with par value of $1,000 on January 15th 2015, redeemable in January 15th 2045. The annual coupon rate is 7% payable semiannually on January 15" and June 15th each year. What is the price investors will pay for this bond on January 15 2025 (right after the coupon payment in that month and six months exactly before the next one) if the market interest rate is 6% per annum? [15 marks]

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