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Bob also wants to invest in some bonds in an effort to diversify his investment portfolio. He is looking at two bonds in particular both

Bob also wants to invest in some bonds in an effort to diversify his investment portfolio. He is looking at two bonds in particular both bonds have a par value of $1000;

  1. A Tim Hortons Bond has a coupon rate of 8%, the coupon pays annually, 10-year maturity and sell at a yield to maturity of 10%.
  2. A Google Inc. Bond has a coupon rate of 12%, the coupon pays annually, 10-year maturity and sell at a yield to maturity of 10%

a)If their yields to maturity are still 10% one year from now, what is the rate of return on each bond?

b)Which bond should Bob choose if he is basing his decision on the bonds rate of return only?

PLZ show the work detail, thank you

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