Question

Which of the following bonds would you prefer to be buying? A) a $10,000 face-value security with a 5 percent coupon selling for $10,000 B) a $10,000 face-value security with a 10 percent coupon selling for $10,000 C) a $10,000 face-value security with a 9 percent coupon selling for $10,000 D) a $10,000 face-value security with a 10 percent coupon selling for $9,000 5

Answer 1

Answer:

D

Explanation:

You have to calculate each bond Yield and keep the highest:

A) 5%

B)10%

C) 9%

D) 11.11%