Mark Goldsmith's brooker has shown him two bonds. Rach has a maturity
of  5 years, a par value of $1.000. and a yield to maturity of 12%.
Bond A has a cupon intrest rate of 6% paid annually. Bond B has a
cupon intrest rate of 14% paid annually.

a) Calculate the selling prive

b) Mark has $20,000 to invest. Judging on the basis of the price of
the bonds, how many of either one could mark purchase if he were to
choose it over the other?(Mark cannot really purchase a fraction of a
bond, but for purposes of this question, pretend that he can.)

c) Calculate the yearly interest income of each bond on the basis of
its cupon rate and the number of bonds that mark could buy with his
$20,000.

d) Assume that Mark will invest the reinvest the interest payments as
they are paid (at the end of each year) and that his rate of return on
the reinvestment is only 10%. For each bond, calculate the value of
the principal payment plus the value of Mark's reinvvestment account
at the end of the 5 years.

e) Why are the two values calculated in part d different? If Mark were
worried that he would earn less than the 12% yield to maturity on the
reinvestment interest payments, which of these two bonds would be
better choice?