1. Would you rather purchase Bond A, Bond B, or both / neither? Please show your work and use practical thinking.

Bond A has the following features: $5,000 offer price, with an annual coupon payment of 15% of the $4,500 par value. This bond comes with a 13% interest rate, maturing in 120 months.

Bond B is callable after 48 months for $8,000. It also has a total annual coupon payment of $500 which is made semi-annually. The par value for this bond is $10,000 and can be purchased for $9,000, with a maturity of 84 months.