Your birthday is this weekend and your grandma offers you three options for a gift. You can either have cash now, a zero-coupon bond, or a bond with coupon payments. Which of the options should you choose given the following details of each option? The cash offer is for $700, which you can invest in a savings account at 2% annually. The zero-coupon bond has semi-annual compounding with 8 years to maturity, a par value of $1000, and a yield to maturity of 4%. The annual coupon bond pays coupons over the next 5-year coupon bond with a 4% coupon rate, a 12% yield to maturity and a par value of $1,000.

Group of answer choices

The zero-coupon bond with a present value of $728.45

The $700 cash

The annual coupon bond with a present value of $711.62

The zero-coupon bond with a future value of $1372.79

The annual coupon bond with a future value of $1000