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Yield Maturity

You are considering purchasing some bonds to diversify your investment portfolio. You have $100,000 to invest. You notice that your local city is issuing some bonds to fund the local elementary school building. They are offering $1000 par value bonds for a rate of 6%. These bonds will mature in 20 years. They are selling currently for $465. Given the following yield of maturity, are they a good buy?

a - 4%
b - 6%
c - 8%

After you do the original calculation, you realize that the bonds are your results now?

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Yield Maturity
You are considering purchasing some bonds to diversify your investment portfolio. You have $100,000 to invest. You notice that your local city is issuing some bonds to fund the local elementary school building. They are offering $1000 par value bonds for a rate of 6%. These bonds will mature in 20 years. They are selling currently for $465. Given the following yield of maturity, are they a good buy?

a - 4%
b - 6%
c - 8%

After you do the original calculation, you realize that the bonds are your results now?
We need to ...

Solution Summary

This solution is comprised of a detailed explanation to consider whether investing in the local elementary school building bond is a good buy.

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