Most assets in David Limited are bonds with the rating of CCC, and the coupon rates for such bonds

are 10% with 20 years to maturity. Most assets in another firm, Katy Limited, are high-rated bonds with

rating of AA, and those bonds are zero coupon bonds with 5 years maturity. Compare the potential risks

(e.g. liquidity risks and reinvestment risks) faced by David Limited and Katy Limited (with not more

than 150 words). (10 marks)