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A wealth management advisor is advising a client of the company. The client wants to invest USD 1,000,000 in a bond rated at least AA.
A wealth management advisor is advising a client of the company. The client wants to invest USD 1,000,000 in a bond rated at least AA. The advisor is looking at bonds issued by Firm X, Firm Y, and Firm Z, and will choose a bond that satisfies the client's rating requirement, and has the highest yield to maturity. The advisor has gathered the following information: Y A+ Z AAA 1.69% Bond Rating Semiannual Coupon Term to Maturity in years Price (USD) Par value (USD) AA+ 1.75% 5 975 1000 1.78% 5 973 1000 5 989 1000 Which bond should the investment advisor purchase for the client? A. Y bond B. Xbond c. Z bond D. Either the Z bond or the Y bond
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