Given the Opportunity to Invest in One of the Three

Essay

Given the opportunity to invest in one of the three bonds listed below, which would you purchase? Assume an interest rate of 7%
$\begin{array} { | l | l | l | l | } \hline \text { Bond } & \text { Face Value } & \text { Annual Coupon Rate } & \text { Maturity Price } \\\hline \mathrm { A } & € 1,000 & 4 \% & 1 \text { year } € 990 \\\hline \mathrm { B } & \mathrm { C } 1,000 & 7.5 \% & 17 \text { years } € 990 \\\hline \mathrm { C } & € 1,000 & 8.5 \% & 25 \text { years } € 990 \\\hline\end{array}$