An Investor Is Seeking to Make an Investment Decision Over

An investor is seeking to make an investment decision over a 4-year term between alternative fixed interest securities of equivalent risk with each providing accumulated interest amounts on maturity. The ABC security offers a fixed interest rate of 8% for a 3-year maturity whereas the XYX security offers a fixed interest rate of 9% for a 4-year maturity. What initial calculation should be the basis for the decision-making between the securities?

A) to calculate a forward rate for year 4 of the XYX security
B) to calculate a forward rate for year 4 of the ABC security
C) to calculate a forward rate for year 3 of the ABC security
D) none of the above