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2. A company must pay liabilities of 1,000 due 6 months from now and another 1,000 due one year from now. There are two available
2. A company must pay liabilities of 1,000 due 6 months from now and another 1,000 due one year from now. There are two available investments: a. 6-month bond; 1000 face with 4% semi-annual coupon. This bond yields 3% converted semi-annually. b. 1-year bond; 1000 face amount; 5% nominal annual coupon rate convertible semi-annually with a 6% yield rate converted semi-annually. Find the amount of each bond to purchase and the total cost of the bonds
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