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Suppose you are presented with an opportunity to buy a 1-ounce Krugerrand coin for R16 000 . The coin is estimated to be worth R18
Suppose you are presented with an opportunity to buy a 1-ounce Krugerrand coin for R16 000 . The coin is estimated to be worth R18 000 in five years' time. Should you buy the coin if the current interest rate is 5% ? Show your calculation and give the reason that informs your decision. (x4) Indicate which of the two bonds in each example below would you expect to generally pay the higher interest rate and give the reason for your answer. a) German government bond or a South African government bond b) 6-month Treasury bill or a 20-year Treasury bond c) Microsoft bond or a bond issued by a new recording company
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