Marcie has some extra money that she wants to place into a relatively safe investment. Her employer
Fantastic news! We've Found the answer you've been seeking!
Question:
Marcie has some extra money that she wants to place into a relatively safe investment. Her employer is offering employees a generous 5% discount for 10-year $5,000 bonds that carry a coupon rate of 6% paid semiannually. The expectation is to match her return on other safe investments, which have averaged 6.7% per year compounded semiannually. (This is an effective rate of 6.81% per year.) Should she buy the bond?
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
Posted Date: