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5. Thania is an investor who is considering two bonds for invest, namely Bond A and bond B. Both bonds have an intrinsic value (Parvalue)
5. Thania is an investor who is considering two bonds for invest, namely Bond A and bond B. Both bonds have an intrinsic value (Parvalue) for $75,000 which will be sold for $ 60,000. Bond A has a maturity date of 17 year with a coupon rate of 3% per year. Bond B has a maturity date of 12 years with a coupon rate of 4% per year. It is known that the yield is 5% per year. Compute fair value both bonds. Which bonds is suitable for Thania to buy? (Bond A is paid 3 times a year and B is paid every 4 months)
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