Question: Bonus Problem 1 (Optional, 30 marks) The following table shows the market information of three straight term bonds available in the market. Bond term Face
Bonus Problem 1 (Optional, 30 marks) The following table shows the market information of three straight term bonds available in the market. Bond term Face value Redemption Market Coupon value price rate (Frequency) 2000 2200 Bond A 5% 2075.3 n years (Annual) 5% (Annual) Bond B 2n years 1000 1100 1180.6 3n years 1000 1100 Bond C 5% 1150.2 (Annual) An investor wishes to invest his/her capital in one of the above bonds. Which bond should he choose? Explain your
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