Your current CD matures in a few days. You would like to find an investment with a higher rate of return than the CD. Stocks historically have a rate of return between 10% and 12%, but you do not like the risk involved. You have been
looking at bond listings in the newspaper. A friend wants you to look at the following corporate bonds as a possible
investment.
Bond
Cur. Yld. Vol Close Net. Chg.
7.5
128
3
ABC 7-15
104-
4
8.4
17
1
1
XYZ 7- 15
100-
4
2
7-15
27:15
4
a.
What is the annual interest you would earn on each bond?
ABC 128; XYZ 17
b. ABC 7.5; XYZ 8.4
3
C
ABC 1047: XYZ 1002
ABC 75; XYZ 7
d.
3