Silhouette Enterprises must make a balloon loan payment of $1000000 in 3 years. The firm’s treasurer wants to purchase a bond that will provide funds for repayment and minimize reinvestment risk. Assume the company has the following four investment options (all with face values of $1000000). Market rates are at 8.00 percent. All bonds are non-callable and are otherwise similar except as noted. Which option best meets the treasurer’s requirements（）
A. A 4-year, zero coupon bond priced to yield 8.50%.
B. A 3-year, 8.00% semi-annual coupon bond priced at par.
C. A 3-year, zero coupon bond priced to yield 8.00%.
参考答案：C
解析：
The 3-year coupon bond fulfills the treasurer’s requirement concerning funds for repayment, it does not minimize reinvestment risk. Among the zero-coupon bonds, the one that best matches the loan’s maturity will minimize reinvestment risk. The treasurer will thus prefer the 3-year, zero-coupon bond. ff he purchased the 4-year zero-coupon bond, he would have to sell the bond prior to maturity to payoff the loan and would face price risk.