Question Six (11 Marks) You are given the following information: You are assessing 2 straight Yen Eurobonds with the same maturity of 5 years. Bond A has a coupon of 11% and Bond B, a coupon of 9% These two bonds have the same yield-to-maturity of 10% and are correctly priced at 108% for Bond A and 91% for Bond B. a. Calculate the simple yield for these two bonds (4 marks) b. Explain what the biases are when using this approach to yield calculation. (2 marks) Page 4 of 10 c. Comment on the relative risk-return relationship of Foreign Bonds and Euro Bonds. (5 marks) Question Six (11 Marks) You are given the following information: You are assessing 2 straight Yen Eurobonds with the same maturity of 5 years. Bond A has a coupon of 11% and Bond B, a coupon of 9% These two bonds have the same yield-to-maturity of 10% and are correctly priced at 108% for Bond A and 91% for Bond B. a. Calculate the simple yield for these two bonds (4 marks) b. Explain what the biases are when using this approach to yield calculation. (2 marks) Page 4 of 10 c. Comment on the relative risk-return relationship of Foreign Bonds and Euro Bonds