Data may be assumed on your own.

CASE 13.2 International Investments A financial analyst is holding some German bonds that of fer increasing interest rates if they are kept until their full maturity in three more years. They also can be redeemed at any time to obtain the original principal plus the ac- crued interest. The German federal government has just introduced a capital gains tax on interest income above a certain level, so holding the bonds to maturity now is less attractive. Therefore, the analyst needs to determine his optimal investment strategy regarding how many bonds to sell during each of the next three years under a few dif ferent scenarios. CASE 13.2 International Investments A financial analyst is holding some German bonds that of fer increasing interest rates if they are kept until their full maturity in three more years. They also can be redeemed at any time to obtain the original principal plus the ac- crued interest. The German federal government has just introduced a capital gains tax on interest income above a certain level, so holding the bonds to maturity now is less attractive. Therefore, the analyst needs to determine his optimal investment strategy regarding how many bonds to sell during each of the next three years under a few dif ferent scenarios