A 10-year United States bond has a current yield of 1.55% with the price of $98.38 and a coupon of 1.38

A 10-year Australian bond has a current yield of 1.76% with the price of $93.00 and a coupon of 1.00

Exchange rate 1.36398 (USD to AUD)

 
1) If you had $1000 USD to invest how much would you make after the 10 years? What would the total amounts and percentages be at the end when the bonds mature? Show math, please.

2) Should you pay more or less for that foreign bond in US Dollars?

3) Which bond is the best to invest in?

Answer rating: 100% (QA)

To calculate the amount you would make after 10 years with a 1000 investment in each bond we need to consider the coupon payments and the maturity value For the US bond Coupon payment per year Coupon ... View the full answer