Question: 3. (i) John is a sixth former and has a serious interest in learning about stocks and bonds. He knows that you are a

3. (i) John is a sixth former and has a serious interest

3. (i) John is a sixth former and has a serious interest in learning about stocks and bonds. He knows that you are a financial management student and has sought your help in explaining to him the difference between stocks and bonds. What would you tell John? (5 marks) (ii) What are the basic features of a bond? (5 marks) (iii) A 15-year, 7 percent coupon rate bond is selling for $839.27. (a) What is the current yield? (b) What is the yield to maturity? (c) Why is the current yield higher/lower than the yield to maturity? (1 mark) (3 marks) (1 mark)

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