Given the opportunity to invest in one of the three bonds listed below,which would you purchase?
Assume an interest rate of 7%.
$\begin{array}{|l|l|l|l|}
\hline \text { Bond } & \text { Face Value } & \text { Armual Coupon Rate } & \text { Maturity Price } \
\hline \text { A } & € 1,000 & 4 \% & 1 \text { year } € 990 \
\hline \text { B } & € 1,000 & 7.5 \% & 17 \text { years } € 990 \
\hline C& € 1,000 & 8.5 \% & 25 \text { years } € 990\
\hline
\end{array}$ C.If funds remain,one may purchase Bond C also since both Bonds B and C are underpriced.

Question

Given the opportunity to invest in one of the three bonds listed below,which would you purchase?
 Assume an interest rate of 7%.
 $\begin{array}{|l|l|l|l|}
\hline \text { Bond } & \text { Face Value } & \text { Armual Coupon Rate } & \text { Maturity Price } \
\hline \text { A } & € 1,000 & 4 \% & 1 \text { year } € 990 \
\hline \text { B } & € 1,000 & 7.5 \% & 17 \text { years } € 990 \
\hline C& € 1,000 & 8.5 \% & 25 \text { years } € 990\
\hline
\end{array}$ C.If funds remain,one may purchase Bond C also since both Bonds B and C are underpriced.

Quizplus · Accepted Answer

The Answer of Given the opportunity to invest in one of the three bonds listed below,which would you purchase?
 Assume an interest rate of 7%.
 $\begin{array}{|l|l|l|l|}
\hline \text { Bond } & \text { Face Value } & \text { Armual Coupon Rate } & \text { Maturity Price } \
\hline \text { A } & € 1,000 & 4 \% & 1 \text { year } € 990 \
\hline \text { B } & € 1,000 & 7.5 \% & 17 \text { years } € 990 \
\hline C& € 1,000 & 8.5 \% & 25 \text { years } € 990\
\hline
\end{array}$ C.If funds remain,one may purchase Bond C also since both Bonds B and C are underpriced.

Given the Opportunity to Invest in One of the Three