cindy in considering investing her excess funds into the bond market. she has little knowledge about the
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Question:
cindy in considering investing her excess funds into the bond market. she has little knowledge about the different ratings of bonds including investment grade bonds and junk bonds. she asks for your help to describe the primary differences between these two. Besides that, she targets two types of bonds, namely bond A and bond B these two bonds have years to maturity and are payable semiannually, par value of RM and a yield to maturity of per annum. Bond A is a zerocoupon bond whereas bond B has a coupon rate of per annum.
a describe to cindy the differences between investment grade bonds and junk bonds.
b calculate the price and current yield of bond A and bond B Then explain to Cindy are bond A and bond B selling selling at a discount premium or par
c Cindy also interested in Malaysian government related bonds. provide examples of government related bonds in malaysia and describe in terms of objective, issuer, and characteristics of these two bonds.
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