Question: Which security has a higher effective annual interest rate? a. A 3-month T-bill selling at $97,645 with par value $100,000. a. A coupon bond selling

Which security has a higher effective annual interest rate?

a. A 3-month T-bill selling at $97,645 with par value $100,000.

a. A coupon bond selling at par and paying a 10% coupon semiannually.

Why?

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