Question
You are considering purchasing bonds to add to your investment portfolio. Bond A is a 15...
You are considering purchasing bonds to add to your investment portfolio. Bond A is a 15 year bond that pays a $120 annual coupon. Bond B is a 20 year bond that pays a $80 annual coupon. Assume both bond terms started 2 years ago and that the discount rate is 10%. A. What are both bonds worth today? B. Would you purchase both, neither, or one of the bonds to add to your portfolio? Why?
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