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QUESTION 4 (10 MARKS) You have recently decided to expand your investment portfolio to include long term 10-years bonds. The two bonds you're currently reviewing

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QUESTION 4 (10 MARKS) You have recently decided to expand your investment portfolio to include long term 10-years bonds. The two bonds you're currently reviewing has the following characteristics: Yield Face Value RM1 million RM1 million Coupon rate 12% Bond A Coupon Paid Semi Annual Annual 11% Bond B 10% 12% (a) How much should you pay for both of the bonds? (8 marks) (b) Bond A and Bond B are trading at premium, par or discount? (2 marks)

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