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Two five year fixed rate bonds requiring the same initial investment of 10,000 pay different coupons. A pays a coupon of 6% and B a
Two five year fixed rate bonds requiring the same initial investment of 10,000 pay different coupons. A pays a coupon of 6% and B a coupon of 13%. Both have the same expected discount rate of 10%. You use the NPV method to evaluate each investment separately. Will you invest on both bonds, in none of them or to any one of them and which? Justify your answer.
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