What role does your forecast of future interest rates play

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Reference no: EM132241855 , Length: word count:750

Assignment -

In an essay, address the following: You have $5,000 to invest for the next year and are considering three alternatives:

1. A money market fund with an average maturity of 30 days offering a current yield of 2.0% per year.

2. A 1-year savings deposit at a bank offering an interest rate of 4.0%.

3. A 20-year U.S. Treasury bond offering a yield to maturity of 4.0% per year.

4. A 20-year corporate bond offering a yield to maturity of 7.

What is the risk profile of each of these assets?

What role does your forecast of future interest rates play in your decisions?

Instructions: Need 750 words. Include your calculations in a table within your paper and be sure to submit only one document to be graded in response to this assignment.

Reference no: EM132241855

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