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Kaylie is looking to start a registered education savings plan (RESP) for her future child. She is interested in purchasing bonds since she sees them
Kaylie is looking to start a registered education savings plan (RESP) for her future child. She is interested in purchasing bonds since she sees them as a safer option than somewhat unpredictable mutual funds. She has found a twenty year bond with a face value of $10,000 which pays a coupon rate of nine percent compounded semi-annually. The bond has a current yield rate of eight percent and it has fifteen years remaining until maturity. Kaylie can purchase this bond for $10,125. Is this a good investment option?
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