Answer:
C.eight-year bond with 5.5% annual interest rate
Explanation:
The computation of the total options under each option is as follows:
As we assume the par value be $1,000
For Option A
Total interest
= 9.5% × $1,000 × 3 years
= $285
For Option B
Total interest is
= 7.25% × $1,000 × 4 years
= $290
For Option C
Total interest is
= 5.5% × $1,000 × 8 years
= $440
For Option D
Total interest is
= 6% × $1,000 × 6 years
= $360
As we can see that the option C contains high value of the total interest. So the same is to be selected
