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(c) Suppose you had a choice between owning a US government treasury bond paying 2% coupon and a corporate bond paying 2 % coupon for the period between March 28, 2022 and April 2. 2022. Considering carefully the day count conventions discussed for US government bonds and corporate bonds, which of the two bonds would you prefer to own and why? Assume both bonds have the same par value, and ignore the risk of default.

(c) Suppose you had a choice between owning a US government treasury bond paying 2% coupon and a corporate bond paying 2 % coupon for the period between March 28, 2022 and April 2. 2022. Considering carefully the day count conventions discussed for US government bonds and corporate bonds, which of the two bonds would you prefer to own and why? Assume both bonds have the same par value, and ignore the risk of default.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(c) Suppose you had a choice between owning a US government treasury bond paying 2% coupon and a corporate bond paying 2% coupon for the period between March 28, 2022 and April 2, 2022. Considering carefully the day count conventions discussed for US government bonds and corporate bonds, which of the two bonds would you prefer to own and why? Assume both bonds have the same par value, and ignore the risk of default.
Transcribed Image Text:(c) Suppose you had a choice between owning a US government treasury bond paying 2% coupon and a corporate bond paying 2% coupon for the period between March 28, 2022 and April 2, 2022. Considering carefully the day count conventions discussed for US government bonds and corporate bonds, which of the two bonds would you prefer to own and why? Assume both bonds have the same par value, and ignore the risk of default.
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