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Which instrument should you purchase

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Question 1: An investor wants to find the duration of? a(n) 15?-year, 9?% semiannual? pay, noncallable bond? that's currently priced in the market at $738.83?, to yield 13?%. Using a 100 basis point change in? yield, find the effective duration of this bond

Question 2. You are considering investing $870 in Higgs B. Technology Inc. You can buy common stock at $22.89 per? share; this stock pays no dividends. You can also buy a convertible bond? ($1,000 par? value) that is currently trading at $870 and has a conversion ratio of 36. It pays $51 per year in interest. If you expect the price of the stock to rise to $32.87 per share in one? year, which instrument should you? purchase?

Reference no: EM133322617

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