For Each of the Following Assets,discuss All of the Essential

question 8

Essay

For each of the following assets,discuss all of the essential aspects of return,risk,and other factors,such as marketability,that investors should consider before the asset:
a. three-month T-bills
b. a 20-year, 8% coupon corporate bond selling for 65 (don't calculate the yield to maturity)
c. municipal bonds
d. a house in the suburbs
e. a 20-year, 15% mortgage on a house in the suburbs (i.e, you would be the lender)
f. U.S. Treasury 10 5/8s of 2015

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Definitions:

EAFE Index

An index that represents the stock performance of developed markets outside of North America, providing a benchmark for international equity investments.

Non-U.S. Stocks

Shares of companies incorporated outside the United States available for investment.

Passive Benchmark

A standard, typically an index, against which the performance of an investment portfolio can be gauged, emphasizing a passive investment strategy.

Foreign Exchange Risk

The potential for financial loss due to fluctuations in exchange rates affecting foreign-denominated investments or transactions.