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3 Village Investments Ltd. (VI) an investment management firm, have requested that you, their senior analyst, review the bond information in the table below:

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3 Village Investments Ltd. (VI) an investment management firm, have requested that you, their senior analyst, review the bond information in the table below: RNM 10 Bond RNM 6 Bond Maturity Coupon Rate 3 years 3 years 10% 6% Coupon Payment Annual Annual YTM Price 10.65% $98.40 10.75% $88.34 Both bonds have the same issuer, same priority in an event of default and spot interest rates. Note that neither bond's price is consistent with the spot rates, shown in the table below: Term 1 yr 2 yr 3 yr Spot Rates (Zero Coupon) 5% 8% 11% ock mong pe sbbLobug Using the information provided in the research tables, recommend either RNM 10 Bond or RNM 6 Bond for purchase by the company. 6

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