Judy and Stan are not happy with the investment returns on their cash - currently held in a deposit account at the bank with an interest rate of 1.5% per annum.

They are considering withdrawing the cash to fund an investment in corporate bonds issued by a company called Tower Limited.

Tower is a property development business that specializes in high rise apartments. The business is well established but in recent times the sales of apartments have declined and the financial performance of the company has weakened. The shares and the corporate bonds of Tower are listed on the ASX.

The current market price of the corporate bonds is AUD750.

The bonds have a remaining term of 6 years, a 7% coupon (semi annual) and a face value of AUD1,000. The yield on similar bonds is 8%.

Comment on any other issues Judy and Stan should be concerned about. (2 marks)