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Question 1: You are interested in buying one corporate bond and your broker has offered two corporate bonds for you to consider. Bond A: paying
Question 1: You are interested in buying one corporate bond and your broker has offered two corporate bonds for you to consider. Bond A: paying annual coupons, with a maturity date of 1 March 2031, an annual coupon rate of 15% and a bond flat price of $100.00 Bond B: paying quarterly coupons, with a maturity date of 1 March 2041, an annual coupon rate of 9% and a bond flat price of $62.10 If the settlement date of both bonds is 1 March 2021, which of these bonds represents the best investment opportunity? (a) Bond A. (b) Bond B. (c) Bond A and Bond B are identical. (d) More information is needed
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