invest in bond A? $ _____

7. Suppose that Austin compares two strategies invest a $1 as follows: Strategy #1) Austin purchases a 1-year bond "A" with an interest rate of 4%, then after it matures. Austin buys another 2-year bond "B" with an expected interest rate of 6% and holds to maturity. Strategy #2) Austin decides to buy a 3-year bond "C" with a 5% interest rate and holds to maturity. Using the expectation theory to determine which strategy would Austin choose?

Ms. White has started her job and wanted to save her money in one way or other. But instead ofsaving money in the bank, she wished to invest it so that money could earn a return. She isintimidated by her friend's investment growth and decides to do the same. She decided topurchase a bond with face value $1,000. The annual coupon payment for the cond is 9%. Theinterest rate of the bond is 13% and maturity 2. She knew that the maturity levels and interestrate of the bond impact its price. So to test the same statement, she purchased 2 more bondswith the same specifications, except, one with maturity 2 and interest rate 10% while the otherwith maturity 3 and interest rate 13%. Determine the impact of change in the value of the bond.A: The bond selling price is $773.98 when interest rate decrease to 10% and $819.01 whenmaturity increases to 3.B: The bond selling price is $796.46 when interest rate decrease to 10% and $853.63 whenmaturity increases to 3.C: The bond selling price is $982.64…

Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon of 4.08 percent. If the current market rate is 5.60 percent, what is the maximum amount Pierre should be willing to pay for this bond? (Round answer to 2 decimal places, e.g. 15.25.) Pierre should pay $_____________