9. Suppose you have the choice of investing in (a) zero-coupon bond that costs $513.60 today, pays nothing during its life, and then pays $1,000 after 5 years or (b) a municipal bond that costs $1,000 today, pays $67 in interest semiannually, and matures at the end of 5 years. Which bond would provide the higher yield to maturity (or return on your investment)?

9. Suppose you have the choice of investing in (a) zero-coupon bond that costs $513.60 today, pays nothing during its life, and then pays $1,000 after 5 years or (b) a municipal bond that costs $1,000 today, pays $67 in interest semiannually, and matures at the end of 5 years. Which bond would provide the higher yield to maturity (or return on your investment)?

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