Which bond would you prefer to hold as an investment? Calculate the YTM of each and explain the preferred investment strategy and risks associated.
A corporate coupon bond face value USA $20,000 purchased for USA $18000 with a term of 25 years Interest rate 5% per annum and to be sold at 16 years. A USA federal government discount one year to maturity bond face value USA $20000 purchased for USA $18000 and sold at 270 days.

Answer rating: 100% (QA)

To determine the preferred investment strategy between the corporate coupon bond and the US federal government discount bond we need to calculate the ... View the full answer