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Which would you prefer? A) A 4% annual yield on a credit risk-free 10-year government bond...

Which would you prefer?

A) A 4% annual yield on a credit risk-free 10-year government bond from the mythical country of Utopia

B) a 3% annual yield on a credit risk-free 10-year government bond from the mythical country of Utopia

C) A 2% annual yield on an investment in 10-year U.S. government bonds

D) A 3% annual yield on an investment in 10-year U.S. government bonds

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Answer #1

The correct answer is option a i.e. we will prefer A 4% annual yield on a credit risk-free 10-year government bond from the mythical country of Utopia

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