Two bonds your broker has offered to you

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Reference no: EM132025670

You as an investor have a choice between two bonds your broker has offered to you. Both bonds have identical risk. Bond one has a market price of $911.00, a coupon of 5% (paid annually), a par value of $1,000 and 12 years to maturity. Bond two has a market price of $873.00, a coupon of 4% (paid annually), a par value of $1,000 and 9 years to maturity. Based on this information, which bond would you choose and why?

Reference no: EM132025670

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