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. b) A coupon bond selling

  1. Which security has a higher effective annual interest rate?
  2. a) A 3-month T-bill selling at $97,645 with par value $100,000.
  3. b) A coupon bond selling at par and paying a 10% coupon semiannually.

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