T9 EIC 5 (Tutorial)

Dylan is thinking of investing in the money market and Sophie is interested in the bond market.

Melbourne Co. is offering commercial paper for 90 days with a face value of $100,000. It is also offering 10-year, $1mil face value bonds that pay a coupon of 7% annually.

Sophie has a YTM of 8% p.a. while Dylan has a YTM of 4% p.a.

The price Sophie and Dylan are willing to pay for their investment is…

(select all correct answers only, selecting the wrong answer will result in a mark penalty. selecting all answers will result in 0)