3. From an investor's perspective, what is the benefit of investing (purchasing) in bond securities?

4. Tell me your cash inflows and outflows if today you purchase a bond with a face value of $1,000, a coupon rate of 3%, and 5 years to maturity for $950. Assume annual coupon payments and that you'll hold the bond until maturity.

Corporate bonds Rolls-Royce and Jaguar Land Rover pay up for bond deals Investors demand high coupons from companies under strain of coronavirus and Brexit Rolls Royces big thalenge comes from the consentong haurravel with my do not rect Ova 2006 CREUTERS Nikou Asgari in London 15 HOURS AGO UK engineering stalwarts Rolls-Royce and Jaguar Land Rover have both dipped into the bond markets for much-needed funding in the past week, with investors demanding hefty interest rates from the coronavirus-hit businesses Rolls-Royce was set to issue 2bn worth of bonds on Wednesday as part of a rescue package that also includes a rights issue of equity. Two years ago, the company was able to borrow six-year debt for just 0.875 per cent. This time, debt spread across three currencies comes with coupons between 4.625 per cent and 5-75 per cent, far above the European benchmark of 3-73 per cent reflected in the ICE Bof index of high-yield debt. The deal, coming after JLR last week issued $70om worth of five-year bonds with a coupon of 7.75 per cent shows that yield-hungry investors are receptive to companies disrupted by the pandemic. But they are demanding generous compensation for putting money to work with badly affected names in UK automotive and aerospace sectors, particularly with the full effect of Brexit still pending "JLR is tied in with Brexit, tied in with whatever rules get made around that. Those risks run right the way through the company... whereas it's a simple question for Rolls: whether planes will be back in the sky," said one Rolls- Royce investor In May, rating agency S&P downgraded Rolls-Royce by two notches, giving it a speculative "junk" rating for the first time in 20 years. JLR's rating sank from BB-to B+ in April, deeper into junk territory - a status that excluded it from accessing the Bank of England's finance support scheme. Despite the high price tag, it is clear that the upbeat bond markets are still a viable source of funding You are seeing challenged companies take advantage of this market," said Fraser Lundie, head of credit at asset manager Federated Hermes. JLR "would not have had the market open to them in the recent past but now do, he said, noting the significant coupon needed to get the deal off the ground. "You're getting paid a lot more than you have been historically for Jaguar," said another high-yield bond fund manager. One of the company's previously issued bonds, which matures next year, offers investors slimmer 4 per cent returns. Investors said a clause in the new bonds that could give the debt collateral in the event of further borrowing helped to get the deal over the line. The carmaker's sales rebounded in the three months to September 2020, with retail sales up 53 per cent compared with the three months to June, according to an investor presentation seen by the FT. Rolls-Royce's key challenge comes from the collapse in global long-haul air travel, which analysts do not expect to recover until at least 2024. One European fund manager likened investing in Rolls-Royce to catching a falling knife". "The industry is facing huge headwinds (including] a drop in demand and environmental stakes ... no thanks, he added. A banker working on the Rolls-Royce deal said it was interesting that these credits have access full stop, adding that investors are clearly willing to support sectors hit by the pandemic-induced downturn. Additional reporting by Joe Rennison