Early 2019 the Indonesian government issued serial Government Securities 005 or Retail Saving Bond (SBR) 005, the coupon rate is 8.15%. In the same year the Government Indonesia also issued Indonesian Retail Government Bonds (ORI) series 016 with a coupon rate of 6.8%. Minimum purchase of IDR 1,000,000 (same as SBR 005). The maturity period for ORI series 016 is the same as SBR 005 is 3 years.

A. Explain the difference between the two based on (i) the coupon interest rate and (ii) the possible capital gain obtained? B. Which do you think is more attractive?