Question: Question 1 (30 marks) a. Bonds can be traded at either premium price, discount price or price at par. Based on the knowledge gained from

Question 1 (30 marks) a. Bonds can be traded at either

Question 1 (30 marks) a. Bonds can be traded at either premium price, discount price or price at par. Based on the knowledge gained from Principles of Finance course, by using your own words, please discuss on how to identify premium bonds, discount bonds and bonds at par as stated above, by providing relevant explanations and illustrating with an example (with table, graph or figure, if any). (Not more than 250 words) [20 marks] b. From the perspective of either an investor and firm, which of the debt or equity financing way is preferable? Please interpret your choice with relevant reasons. (Not more than 150 words) [10 marks]

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