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John is putting some of his savings into bonds. As John's advisor, you have identified the following bonds for John to consider: Bond A B
John is putting some of his savings into bonds. As John's advisor, you have identified the following bonds for John to consider: Bond A B Price 99 102 91 Coupon 4.5% 5.0% 4.0% Coupon frequency Maturity Quarterly 10 years Monthly 5 years Semi-annual 20 years (a) Determine which of these bonds you should recommend John to invest based on the highest returns. (9 marks) Describe three (3) further factors that John must consider in making the final choice among Bonds A, B and C? (6 marks) (b)
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