An investor wishes to compare the following three us dollar


An investor wishes to compare the following three US dollar denominated instruments:

(a) A 91-day T-Bill at a discount of 6.50%.

(b) A CD carrying an 6.75% coupon, with 91 days remaining to maturity, yielding 6.60%.

(c) A Treasury Bond paying a 7¼% coupon, with 91 days remaining to maturity, yielding 6.65%. In each case, the investor plans to hold the instrument until maturity. From the viewpoint of maximizing returns, which of these is the most attractive?

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Financial Management: An investor wishes to compare the following three us dollar
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