George Washington wants to invest in one of two corporate bonds issued by separate firms. One bond yields 7% with a 10-year maturity; the other offers a 10% yield with a 9-year maturity. George thinks the 9-year bond is the better deal since the rate is higher. Is this necessarily so? Explain what factors George should consider before making a choice.

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The Answer of George Washington wants to invest in one of two corporate bonds issued by separate firms. One bond yields 7% with a 10-year maturity; the other offers a 10% yield with a 9-year maturity. George thinks the 9-year bond is the better deal since the rate is higher. Is this necessarily so? Explain what factors George should consider before making a choice.

George Washington Wants to Invest in One of Two Corporate