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(fixed-income concept) Day count/Compounding question: There are two one-year $10,000 investments, assuming both are default-free investments: a. Investment I pays coupon of 6.00%, paying semi-annually
(fixed-income concept) Day count/Compounding question: There are two one-year $10,000 investments, assuming both are default-free investments: a. Investment I pays coupon of 6.00%, paying semi-annually with day-count of 30/360; b. Investment II pays coupon of 6.10%, paying annually with day-count of Actual/365; You can purchase each investment at price of 100, or pay $10,000 upfront. Which investment do you prefer? Why
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