You Have a Choice Between Investing $10,000 in a CD

question 90

Multiple Choice

You have a choice between investing $10,000 in a CD that in six months will pay you $10,190 or investing $9,800 in a T-bill that in 182 days will return $10,000. Ignoring any opportunity cost between the two investments, which will give you the higher annualized return and what will the annualized return be?

• A) T-bill; 2.2%
• B) T-bill; 4.09%
• C) CD; 3.8%
• D) CD; 1.9%