Question 6

a) You just started working as a fresh graduate and you have ghc10,000 to invest to enable you start your own business in fifteen years. Evaluate five factors you would consider in selecting among investment alternatives before investing your money, using relevant scenarios.

b) J & J Manufacturing just issues a bond with a GHC100,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons, and the yield to maturity is 6.8%,

i) How much will the bond sell for?

ii) Is the bond selling at a premium or a discount?

c) As an astute Investment Manager of a firm, Discuss price continuity as a characteristic of a well-functioning market.