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| rev | Admin | (Created page with "'''Solution: A''' Bond I provides the cash flow at time one. Because 1000 is needed, one unit of the bond should be purchased, at a cost of 1000/1.06 = 943.40. Bond II must provide 2000 at time three. Therefore, the amount to be reinvested at time two is 2000/1.065 = 1877.93. The purchase price of the two-year bond is 1877.93/1.07<sup>2</sup> = 1,640.26. The total price is 2583.66. {{soacopyright | 2023 }}") | Nov 20'23 at 19:49 | +414 |