Given the current outlook for interest rates, what would you recommend a friend who is...
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Accounting
Given the current outlook for interest rates, what would you recommend a friend
who is considering the following two investments? Explain your recommendation.
a.A Malaysian government bond with 1.5 years left to maturity yielding 3.0%
b.A Malaysian government bond with 8 years left to maturity yielding 7.6%
2. The following three bonds all have RM 1,000 face value.
If you had to invest in only one bond, which bond would you invest in? Explain your choice.
Bond A B Maturity 5 years 3 years 4 years Required Yield 8% 6% 6% Coupon Rate 7% 6% 4% Current Price RM 960 RM 1000 RM 900.70
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