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Models of Bond Pricing

Choose a particular bond and explain how the interest rate is determined using the three models of bond interest rates presented in

Risk and Reward

Currently the interest yield on short term Treasury Bills is near zero. Longer term rates for mortgages are under 4%. Why would someone want to buy Treasury Bills as opposed to investing in mortgage backed securities? Explain in terms of risk factors (maturity, liquidity, default, etc.).

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9862632

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