An investor would like to have 5000 available at the end of


An investor would like to have $5,000 available at the end of each of the next 3 years. He has a choice of 3 bonds to invest in, each with a par value of $1,000:

i. 1 year 4% annual coupon bond with a yield rate of 3%

ii. 2 year 5% annual coupon bond with a yield rate of 6%

iii. 3 year 6% annual coupon bond with a yield rate of 5%

How much of each bond will he need to spend today to exactly match his desired cash flows?

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Financial Management: An investor would like to have 5000 available at the end of
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