Problem:
Assume that you have a short investment horizon (less than one year). You are considering two investments: a one-year Treasury security and a 20-year Treasury security. Which of the two investments would you view as being more risky? Explain your answer 100 words or more
"why do corporations and governments (local, state, and federal) even issue debt to begin with? What are the advantages and disadvantages to issuing debt? For corporations, are there some tax advantages to issuing debt? Why would a company such as General Electric with a very strong balance sheet want to fund new projects with debt instead of just paying cash? Is it similar to an individual being able to "write-off" a certain amount of the interest expense as a tax deduction? What are the different classification and ratings of debt? Are we now experiencing a "credit" crisis now that even strong borrowers, both individuals and corporations, are having a hard time getting financing?