The family has heard of the German Federal Governments 2020 Green Federal Security initiative, and asks your opinion on whether the fixed income holding should be divided in two, and half of the fixed income portion of the wealth portfolio now invested in these new German bunds?

Analyse this investment proposition, make a recommendation to the family and explain your reasoning, supported by data analysis. Table 4. below sets out the details of the German Federal Government Green Securities which could be invested in.

Q 3. (Hypothetical) German Federal Governments Green Federal Securities available

Table 5.

Notional German Federal Governments Green Federal Securities

0% Bundesrepublic Deutschland 2025

0% Bundesrepublic Deutschland 2030

1% Bundesrepublic Deutschland 2035

1% Bundesrepublic Deutschland 2038

1% Bundesrepublik Deutschland 2040

21:26 OT the Bill the Done EF 309 2021 Details of CA - Indivi... 3-min SH11 Department Treasury 5,000,000 6-mth US Department of Treasury 3,000,000 2% US Department of the Treasury 2021 4,000,000 3% US Department of the Treasury 2022 4,000,000 4% US Department of the Treasury 4,000,000 5% US Department of the Treasury 2036 5,000,000 2029 *Assume all bonds follow calendar year. Eg 2% US Department of the Treasury 2021 matures is redeemed) ar 31.12.2021, so is a 1-year maturity bond at present and that all bonds pay their coupon to investor semi- annually The following interest rates apply in the US market. Table 4. US Zero's - US Interest Rates: Maturity: 3-mths 6-mths 12mths Yield: 0.45% 0.65% 0.80% Notes for Individual Sections contd. 0 3. (Hypothetical) German Federal Government's Green Federal Securities available Table 5. Notional German Federal Government's Green Federal Securities 0% Bundesrepublic Deutschland 2025 0% Bundesrepublic Deutschland 2030 1% Bundesrepublic Deutschland 2035 1% Bundesrepublic Deutschland 2038 1% Bundesrepublik Deutschland 2040 21:26 OT the Bill the Done EF 309 2021 Details of CA - Indivi... 3-min SH11 Department Treasury 5,000,000 6-mth US Department of Treasury 3,000,000 2% US Department of the Treasury 2021 4,000,000 3% US Department of the Treasury 2022 4,000,000 4% US Department of the Treasury 4,000,000 5% US Department of the Treasury 2036 5,000,000 2029 *Assume all bonds follow calendar year. Eg 2% US Department of the Treasury 2021 matures is redeemed) ar 31.12.2021, so is a 1-year maturity bond at present and that all bonds pay their coupon to investor semi- annually The following interest rates apply in the US market. Table 4. US Zero's - US Interest Rates: Maturity: 3-mths 6-mths 12mths Yield: 0.45% 0.65% 0.80% Notes for Individual Sections contd. 0 3. (Hypothetical) German Federal Government's Green Federal Securities available Table 5. Notional German Federal Government's Green Federal Securities 0% Bundesrepublic Deutschland 2025 0% Bundesrepublic Deutschland 2030 1% Bundesrepublic Deutschland 2035 1% Bundesrepublic Deutschland 2038 1% Bundesrepublik Deutschland 2040